Following today’s release of Quiz FY figures for 2018/19, Pippa Stephens, Retail Analyst at GlobalData, a leading data and analytics company, comments: ‘‘FY2018/19 has been a troublesome year for fashion retailer Quiz – with three profit warnings and a poor H2, including a particularly dire first two months of 2019 with shoppers all but abandoning ‘going out’ purchases resulting in heavy discounting of excess stock.
“Its three channels have achieved full-year growth, with group sales reaching £130.9m, up £14.5m on the year, and the retailer achieving a UK clothing market share of 0.2% in 2018.
“However, prevailing challenges for its domestic stores and concessions business in particular pose a serious threat. Quiz’s reliance on weak department store retailers Debenhams and House of Fraser has proved disastrous and remains a warning for other players adopting a concession model.
“As of 31 March 2019, Quiz operated 168 concessions across the UK and has now announced plans to reduce this by 20 during FY2019/20. This was a necessary decision to lessen its dependence on the struggling channel, but the small reduction is not enough to fully mitigate the risks posed. Quiz’s strategy to open more standalone stores within higher footfall areas should be approached with caution, as UK physical clothing spend is expected to decline up until 2022.
“Quiz’s EBITDA for FY2018/19 reached just £4.2m, hindered by the £0.4m bad debt arising from the House of Fraser administration, and is almost half that previously stated in January 2019, and down from the £11.5m anticipated back in October 2018. Given the relentless discounting cycle of its online-only rivals, such as boohoo.com, Quiz has to fight back – but not by following the same path and devaluing its offer. The focus therefore lies in strengthening its product ranges, ensuring they are compelling and that it can justify its midmarket positioning and drive loyalty.
“Online continues to outperform, now accounting for 31.4% of group sales – up from just 13.3% two years ago. Sales via Quiz’s own website rose 58% on FY2017/18, the site could however be slicker and more visually appealing. Despite cutting ties with two of its third-party website partners, this channel still provides a huge growth opportunity for Quiz, and so further differentiation is required to stand out in the crowded market, as shoppers will likely focus on product rather than brand when browsing these sites. Indeed with ASOS being an online innovator, Quiz is under pressure to keep up and make the shopping journey as seamless as possible to minimise abandoned baskets. The introduction of its new delivery saver scheme QVIP will however help secure loyalty among its shoppers.”