SCOTTISH fast fashion chain Quiz Clothing’s bricks-and-mortar policy has been ‘justified’ as it swung to an annual profit, it is claimed.
The Glasgow-based, London-listed group said recovering demand for party wear helped boost profits and revenue, with the latter up 250% in physical stores. However, he also warned that sales could suffer as the cost of living crisis worsens.
The group recorded underlying pre-tax profits of £788,000 for the year to 31 March compared with losses of £9.6million the previous year.
Overall revenue nearly doubled to £78.4m from £39.7m the year before as coronavirus restrictions were further reduced.
He warned of the “potential for sales later in the year to be affected by the effect of the inflationary environment and rising cost of living on consumer confidence.”
The results show that trade in its 62 UK stores and five Irish outlets rebounded, with revenue up 250% to £36.8million, while online sales remained robust, up by 24% over the year and 66% on its website.
READ MORE: Quiz to get back to profit as demand surges for party wear
Analyst Matthew Webb, of Panmure Gordon, said: “Quiz’s strategic decision to maintain a physical store base, albeit on a smaller scale and on very different terms, was justified by the stores’ return to profitability in during fiscal year 22.
“The stores remain an important part of Quiz, contributing the bulk of the 47% of the group’s revenue in FY22 attributable to UK stores and concessions, as well as serving as a ‘showcase’ for the range and managing collections and returns for online orders.
Tarak Ramzan, Founder and Managing Director, said “despite well-documented challenges in the retail industry, we remain encouraged by customer demand for the Quiz brand,” with sales up 62% since beginning of the year.
“While there are currently significant levels of consumer uncertainty, we are confident that Quiz is well positioned to continue to deliver on its strategy and deliver long-term, sustainable and profitable growth,” said Mr. Ramzan. .
“We are very pleased with the strong increase in active customers and the growth in sales through our own website, which is now supported by a flexible and profitable portfolio of stores and concessions,” he said. Quiz said it raised prices “slightly” in the face of rising apparel and shipping costs.
He added: “Widely reported industry-wide global freight disruption and rising costs have affected and continue to affect the group. To date, we have minimized the impact of increased costs on customers resulting from additional transport costs by adjusting delivery schedules to ensure product is available when needed.
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Mr Webb also said in the analysis: “Quiz continues to try to drive footfall by testing new product categories in stores and increasing stock availability. It will continue to open new stores where rental conditions are advantageous. However, the biggest long-term growth opportunity lies in e-commerce, given its greater scalability and structural change in demand. »
He added: “Through a mix of choice and necessity, Quiz reduced its exposure to UK department stores in FY22, from 119 to 69. This included the impact of the closure of Debenhams and Outfit stores. (Arcadia) and the decision to close unprofitable outlets. . Most of the remaining concessions are operated in New Look stores on a capital light basis and are not operated by Quiz staff.
“Quiz will open new dealerships ‘selectively’. Quiz continues to explore opportunities for international expansion through its online, consignment and concession routes to market.
Shares of Quiz closed up 3.4%, or 0.35p, at 10.6p.