Glasgow-based clothing retailer Quiz sees profits plunge
Clothing retailer Quiz has seen full-year profits almost entirely evaporate, plunging amid "challenging trading conditions".
The Glasgow-based fast fashion business saw pre-tax profits dive by 97 per cent to £200,000 for the year to March, down from £8.5 million a year earlier.
The firm blamed the downturn in profitability on the decline in high street footfall and weakened consumer confidence amid political uncertainty.
Despite concerns over consumer spending, Quiz reported a 12 per cent rise in revenues to £130.8m for the year.
Quiz reported revenue growth "across all channels", but was particularly buoyed by a jump in online sales, up 32 per cent to £41m for the year.
In January and March this year, the retailer warned that profits would be lower than expected as growth came in under expectations.
Quiz said it has now concluded a review process it started in March to analyse how it can "restore profitable growth" amid the volatile trading environment.
Following the review, it said there will be "sharper focus" on seizing opportunities for continued online growth.
It said it will also look to short-term measures to improve profitability, including terminating some third-party online contracts, a reduction in its exposure to UK department stores and active management of its store estate as leases come up for renewal.
During the year, it opened three new standalone stores and 25 concessions, although it also closed two stores and a concession site.
Tarak Ramzan, founder and chief executive officer, said: "Despite the challenges faced by the group during the period, Quiz's focus has remained as strong as ever on delivering great products at outstanding value, thereby strengthening our brand's positive reputation amongst a growing customer base.
"As a result, we have continued to achieve sales growth across our omnichannel model both in the UK and internationally.
"Whilst trading conditions have remained challenging in the year to date, the board remains confident that underpinned by our flexible business model and an increasing online focus, the group can return to sustainable profitable growth."
Shore Capital analyst Greg Lawless said: "In our view, life remains tough for the Quiz brand given the high-street conditions and their exposure to both House of Fraser and Debenhams. The business review outcomes appear sensible, but it will take time to restore profitability back to historic levels given the volatility of UK retail trading conditions."