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Fast fashion chain Quiz is finalizing rescue plans that could see the troubled retailer offload up to a third of its stores nationwide.
The drastic move is being led by the founding Ramzan family as the womenswear retailer’s stay on the stock market comes to an ignominious end, crystallizing huge losses for many shareholders.
Any closure is likely to result in hundreds of job losses, which is compounding feeling of darkness surrounding areas of the main street. Quiz has around 60 points of sale and employs around 1,500 people.
The company, chaired by former JD Sports Fashion boss Peter Cowgill, has commissioned restructuring experts at consultancy Teneo to draw up a comprehensive list of options to revive its fortunes.
The family, led by Sheraz Ramzan, who was parachuted in as chief executive last March, is said to be ready to exit the chain’s worst-performing stores in a bid to cut costs and halt the fall
Both prior administration and a company voluntary arrangement (CVA) are understood to be being considered as a way of forcing the closures, which are likely to be unpopular with landlords.
“Nothing is being ruled out,” a well-placed source said ahead of a decision expected in the coming weeks.
Quiz’s problems came to a head in the run-up to Christmas with a series of announcements to beleaguered investors as its financial woes spiraled out of control.
First, the company revealed it was on the verge of running out of cash amid falling sales both in-store and online, then weeks later, it unveiled plans to withdrawal from the London Stock Exchange and go privately.
The measure closes some miserable years as a public company.
Quiz shares started trading on the fledgling AIM market at 161p in a 2017 flotation that raised more than £90m for its founders, but after multiple setbacks had sunk to less than 20p in less than two years They are currently changing hands for less than a penny.
In the summer, with liquidity threatening to dry up, bosses took out an emergency £1m loan from Sheraz’s father Tarak, who set up Quiz as a one-stop shop in Glasgow in 1993. At the time the retailer said it had liquidity of just £. 2.3m, £400,000 in cash and £1.9m of unused bank facilities, which are understood to have been provided by HSBC.
As HSBC is seen as reluctant to continue funding the business, alternative sources of funding are being urgently sought as part of any turnaround plan. New loans are expected to have more punitive terms than existing loans.
Quiz racked up losses of almost £7m last year, a sharp turnaround from the £2.3m profit it made the year before.
