24Business

The fast fashion chain is trying to close stores to survive


Peter Cowgill quiz chairman

Fast fashion chain Quiz is finalizing rescue plans that could see the struggling retailer shed as many as a third of its stores nationwide.

The drastic move is led by the founding Ramzan family, as the listed women’s clothing retailer comes to an ignominious end, crystallizing massive losses for many shareholders.

Any closure is likely to cause hundreds of job losses, making the situation worse a sense of darkness envelops parts of the main street. Quiz has about 60 branches and employs about 1,500 people.

The company, run by former JD Sports Fashion boss Peter Cowgill, has tasked restructuring experts at consultancy Teneo with drawing up an extensive list of options to revive its fortunes.

The family – led by Sheraz Ramzan, who was parachuted out as chief executive last March – is said to be looking to exit the chain’s worst-performing stores in a bid to cut costs and halt its decline.

Both pre-emptive administration and a company voluntary arrangement (CVA) are understood to be being considered as a way to push through the closures, which are unlikely to be popular with landlords.

“Nothing has been ruled out,” a well-placed source said ahead of a decision expected in the coming weeks.

Quiz’s problems came to a head in the run-up to Christmas with a series of announcements to long-term investors as financial problems spiraled out of control.

First the company revealed it was close to running out of money due to declining in-store and online sales, then weeks later it revealed plans to de-list from the London Stock Exchange and go private.

The move caps a miserable few years as a public company.

Quiz shares started trading on the AIM junior market at 161p in the 2017 exchange which earned its founders more than £90m, but after multiple falls it has fallen to less than 20p in less than two years. They are currently changing hands for less than a penny.

In the summer, with liquidity threatening to dry up, bosses asked for an emergency £1m loan from Sheraz’s father, Tarak, who founded Quiz in 1993 as a single shop in Glasgow. At the time the retailer said it had liquidity of just £2.3m, £400,000 in cash and £1.9m of unused bank funds, which are understood to have been secured by HSBC.

With HSBC seen as reluctant to continue funding the business, alternative sources of funding are being urgently sought as part of any turnaround plan. All new loans are expected to come under stricter conditions than existing borrowings.

Quiz racked up losses of almost £7m last year, a sharp turnaround from the £2.3m profit it generated the previous year.

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