UK fashion brand Quiz has warned its full-year results are likely to be impacted by the coronavirus outbreak as it experiences a “substantial reduction to traffic in stores and online.”
In an update prior to the outbreak, the group said its year-to-date performance had been in line with expectations. But that changed at the beginning of March, and the group closed its physical stores and concessions on 22 March in order to ensure the health and wellbeing of its staff and customers.
“Given these factors, revenues and margins in March 2020 are expected to be materially below the board’s expectations. The financial results for the year ending 31 March 2020 will also be impacted by factors such as determining the recoverability of debtor balances, the adequacy of inventory provisions and the requirement for further non-cash store fixture and lease provisions,” it said in a statement.
“The group is continuing to take steps to preserve cash by eliminating non-essential spend, postponing capital projects, substantially reducing stock intakes and deferring payments wherever possible.”
Greg Lawless, analyst at Shore Capital, commenting on the announcement, said: “Not surprisingly, the company has moved into cash preservation mode, like many other retailers by eliminating non-essential expenditure, postponing capital projects, reducing stock intake and deferring payments where possible.
“In our view, Quiz has had a difficult period as a public company, having floated back in summer 2017. Rightly, the company is seeking to preserve cash in the business and with growing uncertainty about the length of time that the store portfolio and concessions will be closed, together with subdued consumer demand given the travel restrictions for consumers, the company faces an uphill battle given the current trading environment.”
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
