Quiz issues profit warning
Written by Peter Walker
Quiz has issued a profit warning due to lower than expected sales from third party online partners, poor performance in UK stores and concessions last month, and a £400,000 provision against outstanding debt linked to House of Fraser’s collapse.
Over the six months to 30 September, the fashion retailer stated earnings would be “no less” than £5.5 million, down £1.5 million on previous expectations.
Group full year earnings are expected to be £11.5 million, from previous estimates of £15.5 million. Sales are likely to be £138 million, against earlier estimates of £150.5 million.
Mike Ashley’s acquisition of House of Fraser in August rescued it from administration, but the terms of the deal mean he is under no obligation to honour the outstanding debts to suppliers and concession brands, which are thought to approach £1 billion.
Quiz had 11 House of Fraser concessions and sold its products through the department store’s website.
“Although online sales through our third-party partners have been disappointing and will impact the group’s performance for the full year, the changing mix towards increased own-website sales will support profitability growth moving forward,” said Quiz chief executive Tarak Ramzan.
“The continued growth of the Quiz brand in combination with our well-invested infrastructure and flexible business model continue to underpin the board’s confidence in the group’s long-term prospects.”