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Quiz warns of decline in profits after disappointing Christmas business

Fashion retailer Quiz has warned of lower profits and revenues after Christmas trading fell short of expectations.

The company, which has 71 stores and 169 concessions in the UK as well as a sizeable online business, said underlying profit for the full year would be around £8.2 million.

Sales are also expected to fall short of market expectations at around £133 million.

The company's shares fell more than 25% in early trading Friday.

In an update for the six weeks to January 5, Quiz said revenue was up 8.4% compared to the same period last year, slowing from year-ago growth of 31.9% despite higher-than-expected discounts.

The group said the retail environment was particularly difficult in November but improved somewhat towards the end of the period.

As a result of the drastic price cuts to reshuffle inventory, the group's profit margin is expected to fall to 60.5 percent in the six months to March 31, compared with 62 percent in the first half.
We remain convinced of Quiz’s long-term potential as an omnichannel fashion brand with a clear customer focus.

Neil Wilson of Markets.com said: “It looks like the discounting is really breaking the neck of retailers. They simply cannot pass on the higher costs by raising prices. Consumers are simply not prepared to pay more. The vicious circle of discounting means that shoppers now expect big discounts.”

Quiz reported a 1.6% increase in sales at its downtown stores and concessions, while online sales rose 34.1%.

Managing Director Tarak Ramzan said: “Against the backdrop of difficult trading conditions over the last few months, Quiz has delivered further revenue growth over the Christmas period thanks to the performance of our own websites.

“However, the growth and margin achieved fell short of our original expectations, which is why the Management Board considers it appropriate to revise its sales and profit expectations for the current year.

“We remain convinced of Quiz's long-term potential as an omnichannel fashion brand with a clear customer focus. Management's top priority remains to deliver further growth for the company and improve profitability going forward.”