QUIZ has declared it is continuing to assess options to maximise shareholder value as it reported a slump in sales in the key Christmas trading period.
The Glasgow-based fashion retailer said sales had tumbled by 11%, or £1.1 million, year-on-year to £8.7m for the month of December.
Quiz said the fall was in line with expectations and reflected trends it had experienced in recent months, as high inflation has dented consumer demand. Reduced demand has resulted in declines in traffic in store and online, which Quiz said had offset “consistent year-on-year trends in key metrics such as conversion rates and average transaction values”.
The update on Christmas trading comes after retailer said in early December that cost of living and inflationary pressures had hit demand during the year, meaning that the near-term outlook was difficult to predict from many UK retailers, including Quiz.
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It said then that the shortfall in demand it had experienced over the prior months and the potential for macro pressures to continue impacting demand meant it anticipated reporting a pre-tax loss “materially larger than previous expectations”, with full-year revenues around 6% to 8% lower.
It also told the City in December that it had launched an immediate review of the strategic options available to the group to maximise shareholder value.
Quiz said yesterday that it intends to report the findings of the review, which is being led by chairman Peter Cowgill, former executive director of JD Sports, by the end of March.
It also said it remains confident of achieving its current market expectations for the full year.
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Quiz had total liquidity headroom of £5.4 million on January 22, including a cash balance of £2m and £3.4m of undrawn bank facilities. This compares with March 31, 2023, when it had headroom of £8.3m comprising cash net of borrowings of £6.2m and £2.1m of unutilised bank facilities. The group’s £4m of bank facilities expire in June and no financial covenants are applicable to these facilities.
Panmure Gordon, Quiz’s nominated adviser and sole broker, said in a note for investors: “As we enter the final phase of FY24, we consider it too soon to determine Quiz’s approach at a strategy level beyond spring summer 2024 as it hinges on the board’s review.
“We also note Quiz’s available bank facilities are set to expire in June 2024 and lenders have been supportive to date. We would therefore expect the findings from the strategic review in March 2024 to heavily factor into the process regarding the facility renewal. Until then we are encouraged to see Quiz has maintained its way through a difficult period.”
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