- Full year swing into the red
- Q1 sales down 11%
- CEO eyes return to profitable growth
Beleaguered fashion brand Quiz’s (QUIZ:AIM) market valuation looks even more threadbare following the latest downwards lurch in the share price.
The stock plunged 20% to 4.1p on news the occasion wear-to-dressy casual wear seller swung to a near-£7 million loss in the year ended 31 March 2024 as sales contracted by 10.6% to £82 million with cost-of-living pressures continuing to crimp consumer demand.
Alarmingly, Quiz suffered revenue declines across all channels - online, UK stores and concessions, international – while the revelation talks have begun with founder and largest shareholder Tarak Ramzan over the provision of a £1 million loan facility to top up the working capital coffers further rattled investors.
STRUGGLING FOR ANSWERS
Hard-pressed Quiz swung from pre-tax profits of £2.3 million to losses of £6.7 million last year after a £1.5 million impairment charge and a spike in finance costs, although one major positive was the year-on-year improvement in gross margin from 61.6% to 62.2% driven by reduced levels of discounting.
Quiz warned current trading continues to be impacted by inflationary pressures, with sales down 11% to £27.3 million in the four months to 31 July, and the retailer expects the trading backdrop to remain ‘challenging’ in the second half.
But relief is arriving in the form of softer sales comparatives and the micro cap retailer reckons it can improve financial performance by increasing revenues and keeping a lid on costs.
Management also highlighted ‘green shoots’ in recent weeks from a number of turnaround initiatives to improve performance and flagged ‘an improvement across in-store and online revenues relative to previous months’.
Driven by Sheraz Ramzan, appointed CEO as part of a recent strategic review led by chairman Peter Cowgill, Quiz’s turnaround strategy is focused on leveraging its core strengths.
These include its well-established omni-channel model, the ‘distinctiveness’ of the QUIZ brand, its store portfolio and an international model which the firm says provides the opportunity for low-risk, capital light growth opportunities.
MAN WITH A PLAN
Sheraz Ramzan conceded the annual results were ‘disappointing’, yet he insisted his charge has ‘identified several focus areas to build a more resilient business, improve our performance, and return to profitable growth in the medium term.’
Quiz is pressing ahead with implementing its recovery plan, but it remains committed ‘to review other potential strategic options that may be available’.
That’s probably code for still being open to a rescue bid.
