Fashion retailer Quiz has reported a plunge in full-year earnings but maintained restructuring measures will ultimately enable it to return to profitable growth.

The retailer was already confronting challenges and had warned on profits before the Covid pandemic hit. Quiz said an overhaul of its store estate and action to ensure liquidity would help it navigate tough conditions as it seeks to restore its fortunes.

Quiz made an underlying loss before tax of £3.7m in the year to March 31, versus a profit of £0.6m the previous year. Underlying EBITDA fell to £0.6m from £4.6m, on group revenue down 10% to £118m.

Online revenue declined 9%, “predominantly reflecting lower sales via third-party websites”. Online accounted for 32% of group revenue, and UK store and concession sales slid 12%.

The retailer said that in the new financial year the Covid pandemic has affected performance. Total sales in the six months to September 30 plunged 73% to £17.2m.

Quiz said it has £4.8m of cash and £3.5m of undrawn banking facilities and “a more flexible and economically viable store portfolio” following restructuring of the estate. 

Founder and chief executive Tarak Ramzan said: “This was a challenging year characterised by macro-economic uncertainty and challenges presented by the accelerating structural shift towards online retail. 

“In addition, from early March the group, along with the wider retail sector, faced significant challenges as a result of the Covid-19 pandemic.

“The board has taken decisive action to protect its customers and its people, preserve liquidity and restructure its store estate to align the business model to the new reality of store retail.

“We continue to rebalance our product offering towards more casual clothing to meet the changing lifestyles of our customers. Looking ahead, we remain confident in the strength of our brand and believe that underlying customer demand remains strong for the brand’s trademark occasion wear which we aim to capitalise on when restrictions on social events are eased. 

“We are confident that the actions we have taken to preserve liquidity and reduce our cost base while continuing to invest in the brand mean that the group can return to profitable growth as market conditions improve.”

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