11th Oct 2019 09:42
(Alliance News) - Womenswear fashion brand Quiz PLC on Friday forecast an interim revenue decline due to a high street sales slump and again warned on the difficult retail market environment in the UK.
In the six months to September 30, revenue is expected to decline by 5.1% to GBP63.3 million from GBP66.7 million. The company said trading has been broadly in line with expectations, despite the challenging market backdrop.
Quiz explained: "As has been widely reported across the sector, and as previously stated by Quiz, the trading conditions on the UK high street have remained very challenging. The group's stores and concessions have experienced a reduction in footfall during the period against the prior year, resulting in weaker than initially anticipated sales."
High street sales were down 11% year-on-year to GBP31.3 million from GBP35.1 million though the rate of decline has tempered in recent weeks, Quiz added.
Despite its high street sales fall, the company has backed the continuation of its in-store retail offering.
Quiz: "We continue to focus on improving the performance of our physical retail outlets and continue to believe in their importance to our omni-channel model and we are actively managing our stores and concessions to ensure their profitability. The average lease length on our stores remains relatively low at 26 months and we continue to appraise the economics of each store as leases come up for renewal."
There was however sales growth from its online service, revenue rose by 7.0% to GBP20.0 million from GBP18.7 million.
Quiz said: "The group has continued to experience solid growth through its own Quiz websites, with sales increasing by 12% year-on-year. This reflects continued investment in the group's online proposition and product range, as well as effective marketing."
The company has stores in Ireland and Spain, as well as franchise operations elsewhere. International sales rose by 3.4% to GBP12.0 million from GBP11.6 million.
Quiz reiterated that it is confident of achieving cost savings of between GBP2.0 million and GBP3.0 million in the medium term.
Chief Executive Tarak Ramzan said: "Overall, the group's trading performance in the first half has been broadly in line with the board's expectations despite the difficult UK trading environment. Sales growth through Quiz's websites has continued, reflecting the investment in our product range and marketing initiatives.
"Whilst trading conditions are expected to remain challenging in the near term, the board remains confident that underpinned by Quiz's flexible business model and an increasing online focus, the group can return to sustainable profitable growth in the medium term."
The company will release its interim results on December 4.
Its stock was trading 3.0% lower at 16.17 pence each in London on Friday morning.
By Eric Cunha; [email protected]
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