Glasgow-based fashion retailer Quiz is facing a critical cash flow challenge, warning it could exhaust its reserves by early 2025 without securing new funding. The company’s recent trading update paints a bleak picture, with “disappointing” Christmas sales exacerbating existing financial pressures.
The retailer attributes its poor performance to a confluence of factors impacting the wider fashion landscape: inflationary pressures dampening consumer spending, coupled with a decline in brand desirability. This double blow has resulted in cash reserves falling “less than previously anticipated,” forcing the board to acknowledge the urgent need for external investment by early 2025.
Quiz, which operates 62 stores and 47 concessions across the UK and employs approximately 1,500 staff, has been navigating turbulent waters for some time. The company recently announced plans to delist from the London Stock Exchange in an attempt to streamline operations and reduce costs.
While online sales showed “signs of improvement” in December, matching figures from the previous year, in-store performance remains a major concern, significantly lagging behind last year’s results. This disparity highlights the ongoing shift in consumer behaviour, with physical retail continuing to face significant challenges.
Chairman Peter Cowgill has outlined the urgent need for “substantial” cost reductions, hinting at potential store closures and business restructuring. In a stark assessment of the company’s financial health, Cowgill acknowledged the “substantial risks associated with the group’s ability to continue as a going concern.”
Adding to Quiz’s financial woes are impending increases in the minimum wage and employer national insurance contributions, set to take effect in April. The company estimates these changes will add £1.7 million to its annual operating costs, further intensifying the need for immediate financial intervention.
The search for new funding is now a top priority for Quiz, as the retailer races against time to secure its future amidst a challenging economic climate and evolving consumer preferences. The situation underscores the pressures facing mid-market fashion brands in the current retail landscape, where adaptability and a strong brand identity are crucial for survival.
