10th Jun 2020 11:01
(Alliance News) - Quiz PLC on Wednesday said 93 jobs are on the chopping block as the retailer said administrators have been called at its store-operating subsidiary.
Quiz shares jumped 18% to 7.94 pence each in London on Wednesday morning, but its shares have lost more than 50% of their value since the start of the year, due to Covid-19.
Quiz explained Kast Retail Ltd, which operates its 82 standalone stores in the UK plus another three in Spain, has decided to appoint joint administrators.
The Glasgow-based retailer said it will buy some Kast assets for GBP1.3 million.
"The board believes that the proposed restructuring announced today will enable the group to operate an economically viable store portfolio alongside its online, UK concession and international channels which are unaffected by today's announcement. The group continues to believe that stores, with appropriate property costs and flexible lease terms, can be a relevant pillar in Quiz's omni-channel model moving forward," Quiz explained.
Chief Executive Officer Tarak Ramzan said its in-store arm is still a "relevant pillar" and the company will seek to re-open stores "where we believe it is prudent and economic to do so".
Quiz added that 822 of Kast's 915 employees will transfer to other areas of the business. Quiz will also "cease to provide services or support to Kast Spain".
Trading at the company's stores have come under pressure in recent months. Consumer confidence and footfall at UK retail destinations has been hit by worsened economic conditions. More recently, Covid-19 lockdowns meant non-essential retailers were forced to shut stores, emptying high streets.
Quiz added: "Although management has been taking proactive actions to address the performance of Quiz's stores, including renegotiating rents on the expiry of leases, as a result of the above significant challenges Quiz's stores estate has been loss-making in the last year.
"The enforced closure of Quiz's stores since March in combination with significant levels of uncertainty going forward about the rate of recovery in consumer demand following the Covid-19 outbreak, has meant that the Kast business is not financially viable in its current structure."
In the year ended March 31, 2019, Kast generated revenue of GBP84.6 million and pretax profit of GBP212,000.
By Eric Cunha; [email protected]
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