Quiz has blamed economic uncertainty and shoppers spending less on the high street as it sunk into the red.
The Glasgow-based retailer added that even though actions to address the poor performance are under way, a number of stores will continue to be loss-making.
It saw a pre-tax loss of £6.8 million for the six months to September 30, compared with a £3.8 million profit in the same period a year ago.
Quiz took the hit primarily due to a £7 million one-off charge related to onerous leases and a re-evaluation of the store estate.
READ MORE: Trump's trade blow wipes nearly £32bn off blue chip stocks
On an underlying basis, which strips out one-off costs, it made a profit of £2.7 million.
Tarak Ramzan, founder and chief executive, said: "Much of the UK retail sector has remained under pressure during the period impacted by macro-economic uncertainty as well as the accelerating structural shift to online retailing.
"Whilst it is disappointing to report a decline of profits year-on-year, management are focused on implementing the actions identified further to the group's business review conducted earlier in 2019.
"We are pleased to report progress improving gross margins and reducing costs across the business, and will look for further improvements to develop our omni-channel offering.
"We have also taken actions to address the performance of our UK stores and concessions through renegotiating rents where possible and exiting a number of loss-making concessions.
"Over the next two years we will have the opportunity to renegotiate or terminate leases in 50% of our UK stores.
"However, before leases can be renegotiated at current and projected sales levels a number of our stores will lose money."
Sales during the current period fell 5% compared with a year earlier, to £63.3 million, although the entire fall came from shoppers not spending as much in stores, where sales in the UK were down 11%.
By comparison, online sales held up and were flat during the period at £20 million.
Cafe-bar operator Loungers has said it sees the potential to more than triple in size after posting surging sales on the back of new restaurant openings.
Loungers, which trades from independently named Lounges and the Cosy Club chain, reported a 22% jump in revenues to £79.8 million for the 24 weeks to October 6.
READ MORE: Sir Tom Hunter backs second ‘confirmatory’ Brexit referendum
The company hailed strong organic sales across its sites as like-for-like revenues increased by 5.4% for the period.
The company narrowed its total loss before tax to £2.5 million from a £4.2 million loss in the same period last year.
Nick Collins, chief executive of the business which floated on the stock market in April, said it has the potential to grow to have around 500 sites across the UK.
Loungers currently has 161 sites, consisting of 133 Loungers and 28 Cosy Club venues, but Mr Collins said he believes it can continue its rapid expansion to give it "more than 400 Lounges and 100 Cosy Clubs" overall.
READ MORE: Law At Work chiefs in line for big pay-out
The dining chain said it is on track to open 25 sites over the full year after opening 10 new sites over the first six months of the financial year.
Advertising agency M&C Saatchi has warned over profits for the second time in three months after being hit by higher costs and a weak performance in the final quarter.
The UK-based firm, which launched an internal review into the accounts of its UK subsidiaries in August, also said it would restructure its UK business in a bid to improve performance.
The company said it expects to face around £11.6 million in one-off costs for the year, up from previous forecasts of £7.8 million, following the accounting review.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article