The fast fashion chain Quiz is finalising rescue plans that could see the troubled retailer jettison as many as a third of its stores across the country.
The drastic move is being led by the founding Ramzan family as the womenswear retailer’s stint on the stock market comes to an ignominious end, crystallising huge losses for many shareholders.
Any closures are likely to trigger hundreds of job losses, compounding the sense of gloom enveloping swathes of the high street. Quiz has around 60 outlets and employs roughly 1,500 people.
The company, chaired by former JD Sports Fashion boss, Peter Cowgill, has tasked restructuring experts at the consultancy Teneo with drawing 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 keen to ditch the chain’s worst-performing stores in an effort to slash costs and arrest its slide.
It is understood that both a pre-pack administration and a company voluntary arrangement (CVA) are under consideration as a way to force through the closures, which are likely to be unpopular with landlords.
“Nothing is being ruled out,” a well-placed source said ahead of a decision that is anticipated in the coming weeks.
Quiz’s troubles came to a head in the run-up to Christmas via a series of announcements to long-suffering investors, as its financial problems spiralled out of control.
First, the company revealed it was close to running out of cash amid a slump in sales both in-store and online, then weeks later, it unveiled plans to de-list 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 a 2017 float that raked in more than £90m for its founders, but following 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 run dry, bosses sought an emergency £1m loan from Sheraz’s father, Tarak, who set up Quiz as a single store in Glasgow in 1993. At the time, the retailer said it had liquidity of just £2.3m, £400,000 cash and £1.9m of undrawn banking facilities, understood to have been provided by HSBC.
With HSBC thought to be reluctant to continue funding the business, alternative sources of financing are being urgently sought as part of any turnaround plan. Any new loans are expected to come on more punitive terms than its existing borrowings.
Quiz racked up losses of nearly £7m last year, a sharp swing from the £2.3m of profit it generated the previous year.