Quiz said this week that its stores continued to be a relevant part of its omnichannel strategy – despite falling visitor numbers. The fast fashion retailer, ranked Top150 in IRUK Top500 research, saw in-store sales fall by more than a tenth in the first half of its financial year, while a greater proportion of its revenues came from online. But it says that it “continues to believe in the benefits of operating an omnichannel model that provides customers with the opportunity to engage with the brand across different channels.” It added: “Capturing Quiz’s significant sales growth potential online remains a key priority for the group.”
Quiz reported group revenue of £63.3m in the six months to September 30 2019. That’s 5% down on the same time last year. Within that, store sales of £31.3m were 11% down on last time, and accounted for just under half (49%) of sales. Shops were responsible for 53% of sales at the same time last year.
Online sales of £20m were flat compared to last year, but this time – as overall sales declined – accounted for 32% of sales, where last year they accounted for 30%. Quiz said that sales on its own website were 12% up on last time, and that it was working to make third party website partnerships more profitable.
International sales of £12m were 3% up on last time (£11.6m) and accounted for 19% of sales, up from 17% a year earlier.
Pre-tax profits came in at £0.6m, before an exceptional £7m write-down of the value of stores. At the bottom line it reported pre-tax loss of £6.8m, down from a profit of £3.8m last time.
At the end of the half-year, Quiz operated 73 UK stores and 171 concessions – after closing nine concessions as part of its aim to close 20. It and has since opened two new stores. It has written down £7m against the value of its stores and is moving towards closing 20 concessions during the year, of which nine have already shut. The retailer said it had no plans to open more stores and that it would only consider doing so if it could be sure of doing so profitably.
Tarak Ramzan, founder and chief executive of Quiz, said the retailer was disappointed to see a decline in profits and said that it continued to generate cash.
“The board remains firmly focused on further improving the group’s financial performance and growing revenues with a strong focus on Quiz’s online and international channels,” he said.
“The exceptional charge incurred in relation to store impairments and onerous leases is partially attributable to the structural shifts whereby consumers are increasingly shopping online. We have a clear customer focus, a healthy brand and a flexible model that the board believes will enable Quiz to adapt to the changing retail environment and return to profitable growth in the medium term.”
Making it more convenient for customers to buy
The retailer says that that its QVIP delivery pass – which offers free next-day and standard delivery and in-store collection for £12.99 a year – has met with a positive response, reflected in larger and more frequent orders. It has had a similar response from its use of Klarna’s ‘buy now pay later’ technology.
Rethinking online strategies
Last year, Quiz brought some unprofitable partnerships with third-party websites to an end. But it says that selling via third parties remains “an important part of our online business” because it is “beneficial in broadening awareness and the appeal of the Quiz brand”. However, it is working with its third-party partners “to optimise the range and amount of stock available to them to improve the financial returns from these arrangements”.
Looking again at stores
The retailer is also looking closely at its stores. It says it believes stores continue to be relevant to its omnichannel business – as long as the associated property and lease costs remain appropriate. Its stores are now, on average, on 26-month leases and it looks at the economics of stores as leases come up for renewal.
Image courtesy of Quiz