Fast-fashion retailer Quiz has experienced a significant decline in performance since the outbreak of Covid-19. The company, which was already facing challenges due to faltering sales before the pandemic, has been severely affected by the current crisis. In particular, Quiz’s focus on occasion dressing, including clothing for parties, evenings out, and weddings, has been hit hard by the lockdown measures.
The effects of the pandemic have been evident since the beginning of March, leading to decreased footfall in physical stores, which have now closed, and reduced traffic on its online platform. In response to the situation, Quiz took the proactive decision to close its shops ahead of the mandatory lockdown imposed by the UK government.
The decline in sales is expected to have a significant impact on Quiz’s financial results for the current month and beyond. With the company’s financial year ending on March 31, revenues and margins are anticipated to be “materially below the board’s expectations”. Additionally, factors such as the recoverability of debtor balances, inventory provisions, and non-cash store fixture and lease provisions will further impact the overall financial performance for the year.
Given these challenges, Quiz has chosen not to provide any guidance for the upcoming financial year. However, the company does have a net cash position of £8.3 million, as well as an overdraft facility and a working capital facility of £2 million each. These facilities are set to expire on April 23, and Quiz is actively seeking their renewal to protect its financial position.
In order to preserve cash, Quiz has implemented several measures. These include the elimination of non-essential spending, the postponement of capital projects, a reduction in stock intakes, and the deferral of payments wherever possible.
The impact of the Covid-19 outbreak on Quiz’s business highlights the vulnerability of retailers that heavily rely on occasion dressing. With parties, events, and weddings currently on hold, it is crucial for companies like Quiz to adapt their strategies and explore alternative revenue streams during these challenging times.
– For more information on the impact of Covid-19 on the fashion industry, visit Business of Fashion.
– To learn about strategies for fashion retailers during the pandemic, read this article on Forbes.