Glasgow-headquartered fashion retailer Quiz is confident it can return to “sustainable profitable growth in the medium term” despite a decline in store footfall.
In a trading update to coincide with its annual shareholder meeting, the group said the “challenging” trading conditions reported in June had persisted over the summer months.
The firm’s chairman, Peter Cowgill, told investors: “Consistent with the widely reported conditions on the UK high street, the business has experienced a reduction in store footfall during the period compared to the previous year when the group experienced particularly strong demand.
“The group’s performance has continued to benefit from sales growth through Quiz’s own websites.”
He added: “Whilst trading conditions are expected to remain difficult, the board continues to believe that, through the strength of Quiz’s flexible business model and increasing online focus, the group can return to sustainable profitable growth in the medium term.”
Quiz noted that group revenues in the financial year-to-date were broadly in line with the same period last year – after adjusting for unprofitable revenue streams that have been terminated during the year.
The group, which operates 73 standalone stores and 174 concessions in the UK and has a growing international presence, plans to provide a further update on trading with regards to the six months to 30 September on 11 October.
Quiz saw its full-year profits almost entirely evaporate, plunging amid “challenging trading conditions”.
In June, the fast fashion business reported a 97 per cent slide in pre-tax profits to £200,000 for the year to 31 March. It 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 £130.8 million for the year. It pointed to revenue growth “across all channels”, but was particularly buoyed by a jump in online sales, up 32 per cent to £41m.
In January and March this year, the retailer warned that profits would be lower than expected as growth came in under expectations.
Quiz said in June that it had 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 a “sharper focus” on seizing opportunities for continued online growth. 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.
Tarak Ramzan, founder and chief executive, said at the time: “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.”