Quiz issues profit warning after sales falter
It follows lower than expected sales through third-party online partners.
Shares in retailer Quiz have plummeted after is became the latest retailer to warn over profits as poor trading and the collapse of House of Fraser hit sales.
The group said that full year earnings are expected to come in at £11.5 million, down from previous estimates of £15.5 million.
For the six months ended September 30, earnings will be “no less” than £5.5 million pounds, £1.5 million lower than previous expectations.
It follows lower than expected sales through third-party online partners, the poor performance of its UK stores and concessions in September and a £400,000 provision against outstanding debt linked to House of Fraser’s collapse.
Mike Ashley’s takeover of House of Fraser in August resulted in a host of suppliers and partners to the retailer being left out of pocket.
Quiz historically operated 11 House of Fraser concessions and sold its products through the firm’s website.
Sales are also set to take a knock this year, Quiz added, coming in at £138 million versus earlier estimates of £150.5 million.
Shares tumbled over 25% to 110p following the warning.
Boss Tarak Ramzan said: “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.
“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.”
In an unscheduled trading update Quiz, which listed last year, said that group revenue increased by 19% to £66.7 million in the six months to September 30.
The Group currently operates 71 standalone stores and 158 concessions in the UK.