SCOTTISH fast fashion chain Quiz Clothing’s bricks and mortar policy has been “vindicated” as it swung to annual profit, it is claimed.

The Glasgow-based, London-listed group said recovering demand for party wear contributed to the profit and revenues hike, the latter of which was up 250 per cent across physical stores. However, it also warned that sales may suffer as the cost of living crisis deepens.

The group posted underlying pre-tax profits of £788,000 for the year to March 31 against losses of £9.6 million the previous year.

Overall revenues almost doubled to £78.4m from £39.7m the year before as coronavirus restrictions were further reduced.

It cautioned over the “potential for sales later in the year to be impacted by the effect of the inflationary environment and increases in the cost of living on consumer confidence”.

Results show that trading across its 62 UK stores and five Irish outlets rebounded, with revenues up 250% at £36.8m, while online sales remained robust, up 24% over the year and 66% up through its website.

READ MORE: Quiz to return to profit as demand picks up for party clothing

Analyst Matthew Webb, of Panmure Gordon, said: “Quiz’s strategic decision to retain a physical store estate, but of reduced size and on very different terms, has been vindicated by the return of the shops to profitability in FY22.

“The stores remain an important part of Quiz, contributing the bulk of the 47% of group revenue in FY22 attributable to UK stores and concessions, as well as serving as a ‘shop window’ for the range and handling collections and returns for online orders."

Tarak Ramzan, founder and chief executive, said that “despite the well-documented challenges across the retail sector, we remain encouraged by customer demand for the Quiz brand”, with sales up by 62% in the year to date.

The Herald: Quiz has said a link-up with Very will drive exposure for its “trademark occasionwear and dressy casualwear"Quiz has said a link-up with Very will drive exposure for its “trademark occasionwear and dressy casualwear"

“Whilst there are significant levels of uncertainty impacting the consumer right now, we are confident that Quiz is well-positioned to continue to deliver against its strategy and drive long-term, sustainable and profitable growth,” said Mr Ramzan.

“We are very pleased with the strong uplift in active customers and sales growth through our own website, which is now supported by a flexible and profitable portfolio of stores and concessions,” he said. Quiz said it had “marginally” hiked prices in the face of rising costs of garments and shipments.

It added: “The widely reported industry-wide global freight disruption and increased costs have affected, and continue to affect, the group. To date, we have minimised the impact of increased costs on customers arising from additional freight costs by adjusting delivery schedules to ensure that product is available when required.”

READ MORE: Glasgow chain Quiz to reach millions in Very link-up

Mr Webb also said in the analysis: “Quiz continues to try to drive footfall through trialling new product categories in the shops and increasing stock availability. It will continue to open new stores where lease terms are favourable. However, the greatest long-term growth opportunity is through the online business given its greater scalability and the structural shift of demand.”

He added: “Through a mixture 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 (Arcadia) stores 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 concessions ‘selectively’. Quiz continues to explore international expansion opportunities through its capital-light online, consignment and concession routes to market.”

Shares in Quiz closed up 3.4%, or 0.35p, at 10.6p.