Quiz blames difficult UK trading conditions as profits fall

Fashion retailer Quiz has reported a 5% drop in profits to £63.3 million, blaming tough trading conditions. Online sales continued to grow 12% year-on-year, while international sales increased 3% to £12 million.

It’s been a difficult year for Quiz, which has highlighted that difficulties on the UK high street are impacting the business which has seen a drop in store footfall. The retailer reported a profit warning last October, thanks to supplier partnership issues following the collapse of House of Fraser, while a fresh profit warning hit headlines back in March.

"Overall, the group's trading performance in the first half has been broadly in line with the board's expectations despite the difficult UK trading environment. Sales growth through Quiz's websites has continued, reflecting the investment in our product range and marketing initiatives,” said Quiz CEO, Tarak Ramzan.

“Whilst trading conditions are expected to remain challenging in the near term, the board remains confident that underpinned by Quiz’s flexible business model and an increasing online focus, the group can return to sustainable profitable growth in the medium term."

Quiz said it is “actively managing” stores and concessions to ensure profitability, while leveraging an omnichannel model. Following a review earlier in the year, the business is set to make between £2-3 million cost savings in the medium term.

‘‘Quiz continues to bemoan the challenging trading conditions and lack of footfall on the UK high street, and while consumers are now much harder to convert into customers owing to tightened purse strings,” commented Kate Ormrod, lead retail analyst at GlobalData.

“The retailer, which has found its niche in occasionwear and partywear, has witnessed its dependence on department store concessions backfire over the past year. With Debenhams’ store closures on the horizon and no clear path to recovery for the department store operator, there will undoubtedly be further fallout for Quiz. This makes its previous commitment to closing 20 concessions in FY2019/20 wholly insufficient, and we expect further locations to close. Accelerating online growth remains a focus, but the channel has been far from a saviour in H1.”

She added: “The peak trading period is unlikely to provide much respite for retailers this year, and given its product specialism, Quiz has more riding on Christmas than most and must fully exploit any opportunities.”