Fashion firm Quiz issues second profit warning
Fast-growing type store Quiz has made its second profit warning in 3 months.
It now expects to make £eight.2m, down from an estimate of £11.5m made in October.
Quiz objectives 16 to 35-year-old “fashion forward females”. Last 12 months it introduced a brand new assortment with Love Island finalist, Gabby Allen.
Glasgow-based Quiz used to be based in 1993 and has 70 retail outlets and 148 concessions throughout the United Kingdom, in addition to dozens of franchises in a foreign country.
It has retailers within the Republic of Ireland, Saudi Arabia, Malaysia, Singapore, United Arab Emirates, Cyprus, Egypt, Georgia and Pakistan.
After the announcement its stocks slumped by means of 33% in London buying and selling.
The profit warning comes regardless of experiences that its revenues are rising.
The staff stated that Christmas buying and selling – between 25 November 2018 and five January – noticed revenues upward thrust eight.four%.
The staff’s on-line income jumped by means of 34.1% all the way through the duration.
Founder and leader govt Mr Ramzan stated: “Against the backdrop of challenging trading conditions over recent months, Quiz has delivered further revenue growth over the Christmas period driven by the performance of our own websites. “
But he stated the expansion and the margin completed had “been below our initial expectations”.
Gross margins within the six months to 31 March 2019 at the moment are anticipated to be round 60.five%, down from 62% within the six months to 30 September.
‘Discounting killing shops’
Neil Wilson, analyst at Markets.com, stated: “Quiz changed into the newest High Street casualty as its stocks plummeted on a earnings warning. Overall efficiency is not dangerous in any respect – gross sales rose greater than eight.four%, led by means of a 34.1% bounce in on-line revenues. High Street gross sales held up good enough, emerging 1.6%.
“But we were given a nasty earnings warning. It looks as if discounting is truly killing shops.
“There is just no way they can pass on higher costs by raising prices. Consumers are simply not prepared to pay more. The discounting vicious circle means shoppers are now expecting big price reductions. Margins at Quiz are like others coming under a lot of pressure from heavy discounting.”
The staff attracted greater than £100m from buyers when it floated at the London Stock Exchange’s junior Aim marketplace in July 2018.
It put aside greater than £10m of that to assist fund additional growth.