Shares in Scottish fast fashion retailer Quiz were more than a third lower in trading this morning after the company warned that inflationary pressures have continued to hamper demand for its party and occasion wear.
In July the company announced a "strong recovery" for the year to March with pre-tax profits of £2.3m, up from £800,000 previously. However, that was followed by a double-digit decline in sales in the first quarter of the current financial year.
READ MORE: Fashion chain Quiz gets set for the next challenge
"Since then, inflationary cost pressures have continued to impact consumer confidence and demand for Quiz's products," the company said. "As a result, overall revenues in the year to date have continued to be lower than the previous year and below management's prior expectations."
During the five months to the end of August Quiz recorded an 11.5% decline in store sales to £19.3m, while online sales slumped by 23.8% to £10.9m. International sales were 10.5% lower at £6.8m.
The group has 64 stores and 61 concessions in the UK. It has a further five stores and 21 concessions in Ireland that make up its international division.
Quiz said if the current trend in revenues continues into the second half, full-year revenues will be 6-7% lower than current market expectations resulting in a pre-tax loss of "no more than" £1.5m.
"Whilst the impact of cost of living pressures on consumers' disposable income persists, management continues to retain a tight control on costs and is proactively reviewing all aspects of the business to mitigate the impact of the current economic and trading environment on the group and identify potential strategies to drive additional revenue growth," Quiz said.
"Longer-term, the board remains confident that Quiz's product proposition and commitment to providing glamorous looks at value prices will continue to appeal."
Originally set up in 1993 by Glaswegian businessman Tarak Ramzan, Quiz debuted on London's Alternative Investment Market (AIM) in 2017 with a flotation value of £200m. As of 11.30am they were trading 35.4% lower at 5.7p.
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