Quiz shares fall, owner rules out privatisation
Shares in Quiz dived by more than 10% on Wednesday as investors digested the partywear brand’s weak half-year report, but founder and CEO Tarak Ramzan vowed not to delist the chain.
The stock was trading at 15.1p on Thursday morning, which values the business at just £18.8 million. The figure is dramatically lower than the £200 million valuation Quiz had when it floated on London’s alternative capital market AIM in 2017.
“We're focusing on building the share price back up and adding value to all the shareholders,” Ramzan told the Daily Telegraph hours after unveiling a £6.8m first-half loss. Revenues for the period ended September 30 fell 5% to £63.3 million.
In a trading update, the clothing company blamed “continued challenging market conditions” and concession troubles for its disappointing financial performance. In fact, revenues from UK stores and concessions plunged 11% to £31.3 million, while international sales grew 3% and online revenues remained flat.
The concession format has been giving Quiz executives a headache since House of Fraser collapsed last year, costing it £400,000. In a bid to stop the decline, the company is exiting a number of loss-making concessions and said it could renegotiate or terminate leases in 50% of its UK stores over the next two years.
‘‘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, its performance, with group revenue declining £3.4m to £63.3m, highlights its failure to excite shoppers with its ranges and entice them to spend,” said GlobalData retail analyst Pippa Stephens.
“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.”
She added that the company’s plans to close 20 concessions are “wholly insufficient”, and that further locations are expected to close.
The Christmas trading period will be crucial for the business given its range of party dresses. Quiz said it has seen a positive response to recent product ranges, with “pleasing” sales across Black Friday week.
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