Quiz secures extension to banking facilities
HSBC Bank has agreed to give occasionwear brand Quiz an extension to its banking facilities while it undertakes a review of various potential trading scenarios during the pandemic.
The financial arrangement, which had previously been due to expire this Thursday 23 April 2020, has been extended until the end of July.
This includes a £2 million overdraft and a working facility of £1.5 million. In addition to these facilities, Quiz said it had a cash pile of £6 million as of 20 April.
The extension comes on the back of plummeting demand for party dresses, coupled with a loss of store sales due to lockdown restrictions. The Scottish retailer reopened its distribution centre on 14 April to serve online customers after implementing a number of safety measures to protect the health of its workers.
But Quiz’s problems started well before the Covid-19 outbreak. Last year, group revenues grew 12% to £130.8 million, but pre-tax profit plummeted by 97% to just £0.2 million. Its woes continued into the first half of the new financial year, with revenues dropping by 5% and a pre-tax loss of £6.8 million due to expensive shop leases.
Quiz has warned that the year ending 31 March 2020 will be impacted by a “substantial reduction” in traffic in stores and online due to the pandemic.
Further short- and medium-term trading scenarios are being currently reviewed by the board of directors. In the meantime, non-essential spend has been eliminated, capital projects have been postponed and stock intakes have been substantially reduced to preserve the company’s cash position.
"We are taking the actions needed to preserve cash and manage liquidity throughout this unprecedented and challenging period in order to ensure that Quiz remains well positioned to deliver its strategic plans over the longer term,” said CEO Tarak Ramzan.
“We are grateful for the constructive dialogue with and ongoing support of our stakeholders, including colleagues, suppliers and partners as well as our bank, HSBC.”
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