In Focus: Grabal Alok (UK)

In 1990 QS went public, continuing to grow sales through the early 1990s recession with its appropriate format. But it faltered as the value clothing market hotted up, and the retailers such as Matalan and Primark took up the running with larger stores, while the 100-plus QS chain’s previously impressive margins disappeared.

A group of investors took QS private in 2002 and merged the operation with David Tucker’s Midlands-based Bewise. But merging two struggling operations tends not to create one strong business and thereafter it was downhill into administration in 2006.

India-based supplier Alok stepped in, raising its existing 26% stake to a controlling interest. A $1bn presence in India, Alok’s plan has been to switch the UK fascia from QS to a more upmarket, fashion-focused Store Twenty One and introduce the latter into India, where its manufacturing interests are complemented by the 200-strong H&A retail chain.

The UK operation has been heavily loss-making, the 200 or so stores with annual sales of just below £100m, racking up cumulative pre-tax losses of almost £80m in the past four financial years, although a much reduced loss of £5.4m was made in 2009/10.

The QS-to-Store Twenty One conversion rate has been overstated. With 50 converted by early 2010 and now 80 in autumn, the 150 target by Christmas is unrealistic. A target of 300 to 350 stores in the UK by the end of 2012 has since apparently been raised to 500. This seems unlikely to be achieved, especially as the conversion programme is likely to continue into 2012.