Quiz losses shrink, revenues down but recent sales are encouraging
Struggling fast fashion retailer Quiz announced improved full-year results on Wednesday with the 12 months to the end of March seeing a narrower operating loss, despite a sales plunge, and the post-year-end period’s sales improving.
That said, the company isn't out of the woods yet and revenue in the year was down to £39.7 million from £118 million in the previous 12 months. That was understandable given that the latest year covered three UK lockdowns and volatile reopening periods, with the previous year having only included a few weeks of lockdown.
The gross margin decreased to 53.4% from 60.3%, reflecting an increased level of discounting in part as the result of enforced store and concessions closures.
The company said gross profit fell to £21.2 million from £71.1 million a year ago and the operating loss was £9.4 million, compared to a loss on the same basis of £28.6 million a year earlier. Pre-tax profit was £6 million including a more-than-£10 million gain from the disposal of a subsidiary, up from a loss of £29.4 million a year ago.
Trading appears to be improving post-year-end due to the removal of restrictions on large-scale social events “with performance approaching pre-pandemic levels on a like-for-like basis”.
In the five months to the end of August, it saw sales of £30.6 million, which was almost as much as the whole of the previous financial year and was £17.4 million higher than the equivalent period in the previous year.
That came after a major restructuring programme that saw some store closures and a reduction of its dependence on third-parties.
With the recovery in revenues experienced to date, the group anticipates generating a positive cash flow from operating activities in the year ended 31 March 2022.
And it said that from here, a higher proportion of revenues will come from its own stores and websites, which have traditionally generated higher returns than other revenue streams.
CEO Tarak Ramzan said: “Against a backdrop of highly challenging trading conditions during the year, including the enforced closures of stores and concessions for substantial periods and the cancellation of social events that are a key driver for demand of Quiz’s trademark occasionwear, we have taken decisive actions to position the business to return to long-term profitable growth, including reducing the size of our store estate, decreasing costs, and maintaining very tight cash management.
“We have continued to invest in our own e-commerce channels as we optimise our omnichannel model. We remain confident in the strength and appeal of Quiz as an occasionwear-led brand, as has been evidenced by the increase in demand and positive trends across our operational KPIs as social events returned during the summer. This continues to underpin the board's confidence in our ability to continue to improve performance and achieve profitable growth as more normal trading patterns return.”
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