Struggling Scottish fashion retailer Quiz Clothing has plunged to an increased loss and again warned it is close to running out of cash as its shareholders prepare to vote on taking the company private.
The Glasgow business, which has about 1,500 employees, continues to seek more funds after a disappointing Christmas trading period.
As announced on 6 December, the cash headroom available to the business is less than previously anticipated.
Today it said ongoing improvements in the group’s cost base “will be offset by the recent proposed changes to the National Living Wage and Employer’s National Insurance arrangements, resulting in circa £1.7 million per annum of additional costs from April 2025”.
The group has £4m of bank facilities which are scheduled to expire on 30 June 2025. There are no financial covenants applicable to these facilities which are repayable on demand.
As at 26 December it had net borrowings of £3.5m and total liquidity headroom of £0.5m.
“The board anticipates that additional funding will be required by the group in early 2025,” it said as it announced a £4.7m loss before tax for the half year to the end of September against £1.5m last year.
As announced in the past week the directors have concluded that it is in the best interests of the company and its shareholders to cancel its trading on AIM and for the company to be re-registered as a private limited company.
A General Meeting will be held at 11am on 8 January 2025 at 61 Hydepark Street, Glasgow to vote on the proposal. If approved by at least 75% of the votes cast, the cancellation will become effective on 23 January and all non-executive directors will resign.
The company operates 62 stores and 47 concessions across the UK.
Difficult trading history
Daily Business revealed Quiz’s intention to float in April 2017 and its shares were admitted to trading on AIM in July 2017.
The group’s revenue grew from £89.8m at the time of IPO to £130.8m in 2019.
Following the significant impact of Covid on the group’s revenue from 2020 and subsequent restructuring of its store portfolio, revenues partially recovered and grew to £91.7m in the year ended 31 March 2023.
Subsequently, customer demand was impacted by the widely reported cost of living and inflationary pressures with revenue declining to £82m during the 2024 financial year with the group generating a loss in comparison to a profit in the prior period.
Given the ongoing decline in customer demand, revenue in the year ended 31 March 2025 is expected to be below 2024 revenue.