Quiz plunges after warning over need for extra funding
The retailer said it saw a ‘marked decline’ in demand in its stores and online last month.
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Your support makes all the difference.Fashion chain Quiz has plunged in value after warning it could need urgent funding in the coming months following poor sales.
Shares in the company dived by more than 40% in early trading on Friday as a result.
The retailer, which runs 62 UK stores and 47 concessions, said it saw a “marked decline” in demand in its stores and online last month – a key trading period.
It said a year-on-year slump in store traffic in November led to “significant reduction in revenues”, which were “only modestly” offset by spending over the Black Friday weekend.
The firm told shareholders that sales dropped by 5.7% to £24.9 million for the four months to the end of November, compared with the period a year earlier.
This included a 9.7% decline across UK stores and concessions, as well as an 8.1% decline online.
It said the online business was also particularly affected by a weaker performance in November.
The company said its recent weak performance means it has less cash headroom than expected, at £1.2 million at the end of last month.
The group, which also has borrowings of £2.8 million, currently has a lending facility worth £4 million which is due to expire in June.
However, it warned on Friday that it now expects to use these fully by the first quarter of next year. It has also previously said its largest shareholder has offered it a potential further £1 million.
Bosses said they are therefore reviewing the retailer’s financing options and working with advisers in a bid to secure more funds.
It said that, without a sharp improvement in performance, it will need extra cash in the first three months of next year.
Quiz also revealed that it expects to face £1.7 million in extra costs next year due to the autumn Budget, which will push its National Insurance payments higher.