Fast fashion chain stores close to survive
The challenge of the fast fashion chain is finalizing rescue plans that could see the troubled retailer jettison about a third of its stores across the country.
The drastic move is being led by the founder of Ramzan as the women’s clothing retailer’s ignominious end to the stock market is costing many shareholders huge losses.
Any closures could result in hundreds of job losses, and more A sense of darkness on a mighty street. Quiz has about 60 outlets and employs about 1,500 people.
The company, led by former JD Sports fashion boss Peter Cowgill, has tasked restructuring experts at consultancy Teneo with developing 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 looking to shed the chain’s worst-performing stores in a bid to cut costs and arrest the slide.
It is understood that pre-liquidation administration and Company Voluntary Arrangements (CVA) are being considered as alternatives to force closures that are unpopular with landlords.
“Nothing is ruled out,” a well-placed source said, ahead of a decision expected in the coming weeks.
As the financial crisis spiraled out of control, questions came to the fore in the run-up to Christmas with a series of announcements for long-strapped investors.
First, the company stated that the decline in in-store and online sales was about to end with cash, then weeks later, it announced plans to do so. Delisted from the London Stock Exchange And go private.
The move caps a miserable few years as a public company.
Quiz shares began trading on the AIM Junior Market at 161p in 2015. They are currently exchanging for less than a penny.
In the summer, with liquidity likely to dry up, bosses sought an emergency £1m loan from Shiraz’s father, Tarak, who set up Quiz as a one-stop shop in Glasgow in 1993. It is understood that £2.3m, £400,000 in cash and £1.9m of undrawn bank facilities, was provided by HSBC.
Given HSBC’s unwillingness to finance the business, alternative sources of finance are being urgently sought as part of any turnaround plan. Any new loans are expected to incur higher penalties than existing loans.
Test made a loss of almost £7m last year, a sharp turnaround from its £2.3m profit the previous year.
