Subsidiary in administration
Quiz restructures stores ‘to ensure we have a future’
Quiz is renegotiating rents
Fashion retailer Quiz Clothing is renegotiating leases on most of its loss-making standalone stores after putting Kast, the subsidiary which operates them, into administration.
Another subsidiary, Zandra, has repurchased certain assets from Kast, but not the 82 stores, in a £1.3m deal.
As part of the acquisition, the employment contracts of 822 of Kast’s 915 employees will transfer to Zandra.
The company is also renegotiating rents on its head office in Glasgow and distribution centre in Bellshill.
KPMG was appointed as administrators to Kast Retail and announced the closure of 11 stores, including those in Kirkcaldy, Chester, Ipswich and Oxford.
The board said it believes that the proposed restructuring announced today will enable it to operate an economically viable store portfolio alongside its online, UK concession and international channels which are unaffected by today’s announcement.
The group said it continues to believe that stores, with appropriate property costs and flexible lease terms, can be a relevant pillar in QUIZ’s omni-channel model. It remains confident in the relevance of the QUIZ brand and its omni-channel model to deliver future sustainable growth in both the UK and internationally.
As at 9 June, the group had £5.93m of cash available to it and additional bank facilities of £1.75m which expire on 31 July. Further to the group’s announcement on 21 April, it is in discussions with regard to securing a longer-term bank facility.
Tarak Ramzan, chief executive, said: “It is with deep sadness and regret for some of our colleagues and partners that we had to take this decision to restructure the Group’s operations.
“Physical retail in the UK was facing a major structural challenge prior to the outbreak of COVID-19 with the economics of operating stores on traditional leases becoming increasingly difficult.
“Whilst we have taken pro-active actions over the past 18 months to drive footfall to our stores and renegotiate leases to improve performance, the significant economic uncertainty we now face as consumers and businesses emerge from the COVID-19 pandemic has meant that, in order to ensure a sustainable future for the Group, we have taken this decision to place the subsidiary which operates our stores into administration.
We will be seeking to re-open QUIZ stores where we believe it is prudent and economic to do so– Tarak Ramzan, Quiz
“We continue to believe that stores, with appropriate property costs and flexible lease terms, can continue to be a relevant pillar in our omni-channel model and we will be seeking to re-open QUIZ stores where we believe it is prudent and economic to do so.
“We believe that with an appropriately structured store estate in combination with our capital light concession model, international channel and online focus QUIZ will be better positioned for all its stakeholders over the long-term.