Fast fashion brand Quiz reported a “disappointing” drop in sales over the crucial Christmas trading period, as both online and in-store revenue declined despite a strong Black Friday performance.
The retailer’s share price plunged 13.61 per cent this morning after it revealed that group revenue plunged 9.3 per cent, dragged down by a 14.8 per cent drop in online sales.
Read more: Quiz swings to a £7m loss
The company said it ended unprofitable partnerships with a number of third-party websites, which, along with weaker sales across remaining platforms, impacted overall online revenue.
Revenue through the company’s own website increased 5.9 per cent as Quiz pulled back on promotional activity in the seven weeks to 4 January.
A drop in footfall at Quiz stores and concessions saw revenue at bricks and mortar stores fall seven per cent.
Retail experts had warned that a spike in sales during the Black Friday discounting event could lead to a slump over the traditional Christmas shopping period.
However, the retailer said action to improve gross margins and cut costs has largely offset the impact of lower than anticipated sales, meaning overall performance in the year-to-date is in line with the board’s expectations.
Arlene Ewing, investment manager at Brewin Dolphin, said: “The bad news continues for Quiz with a decline in revenues in its crucial Christmas update. Today’s statement will likely do little to ease the concerns of those in the City who have fretted about the business for some time – particularly the decline in online sales, which had previously been a bright spot.
“While it is undoubtedly positive that management is taking ‘proactive actions’ to improve margins and boost cost efficiencies, there is a lot that needs to be done to make Quiz capable of managing the challenges and changes faced by modern retail.”
Quiz chief executive Tarak Ramzan said: “Whilst the trading backdrop has remained challenging, it is disappointing to report a decline in revenues in the period.
“We were pleased that revenues through our own websites grew in the period with less promotional activity than in the prior year, which underpins our confidence in the health of the Quiz brand.
“We have continued to make good progress in improving gross margins and reducing costs in line with the strategic priorities set out by the board last year.
“With our cash position, we remain confident that we can improve our financial performance and grow revenues.
“We have a clear customer focus and a flexible model that the board continues to believe will enable Quiz to adapt to the changing retail environment and return to profitable growth in the medium-term.”