Quiz, the popular occasionwear brand, has announced that it has secured an extension to its banking facilities with HSBC Bank in a bid to navigate the challenges brought about by the Covid-19 pandemic. The extension, which was set to expire on 23 April, has now been extended until the end of July. This includes an overdraft of £2 million and a working facility of £1.5 million. Additionally, as of 20 April, Quiz had £6 million in cash reserves.
The decision to extend the banking facilities comes at a time when demand for party dresses has significantly dropped and store sales have been significantly impacted by the lockdown restrictions. However, Quiz reopened its distribution centre on 14 April after implementing strict safety measures to ensure the protection of its employees, in order to continue serving online customers.
It is important to note that Quiz was already experiencing financial difficulties prior to the pandemic. Despite a growth in group revenues by 12% to £130.8 million in the previous financial year, the company saw a massive drop in pre-tax profit, which plummeted by 97% to just £0.2 million. In the first half of the current financial year, Quiz witnessed a 5% decline in revenues and reported a pre-tax loss of £6.8 million, primarily due to expensive shop leases.
The Covid-19 pandemic has further negatively impacted Quiz’s business, leading the company to anticipate a significant reduction in footfall both in stores and online for the year ending 31 March 2020. As a result, the board of directors is currently reviewing short- and medium-term trading scenarios.
Quiz has taken urgent cost-cutting measures to safeguard its cash position. This includes slashing non-essential spending, postponing capital projects, and significantly reducing stock intakes. These actions have been taken in an effort to manage liquidity during this challenging period.
CEO Tarak Ramzan has expressed his gratitude for the support of all stakeholders, including colleagues, suppliers, partners, and HSBC Bank. He assured that Quiz is taking all necessary steps to preserve cash and manage liquidity during this difficult time. The brand remains focused on maintaining a strong position to carry out its strategic plans in the long-term.