Quiz Clothing Looking at a CVA

According to reports, Quiz is purportedly looking to close up to one-third of its stores in order to stabilise its struggling business and reduce costs.

The fast fashion chain, which now employs about 1,500 could lose hundreds of jobs as a result of the move, which was lead by the founding Ramzan family.

Quiz has hired restructuring specialists at Teneo to investigate its possibilities. Quiz is scheduled to delist from the London Stock Exchange’s AIM market and return to private ownership after a shareholder vote earlier this month.

Possible actions to help with the closures include a company voluntary arrangement (CVA) or pre-pack administration.

A person familiar with the matter told the Telegraph who originally broke the story that “nothing is being ruled out,” and that a decision is anticipated in the upcoming weeks.

Since taking over as CEO in March 2023, Sheraz has reportedly concentrated on reducing expenses by selling off the chain’s underperforming locations.

With only £2.3 million in liquidity, including £400,000 in cash reserves and £1.9 million in undrawn banking facilities, Quiz disclosed in the lead-up to Christmas that it was on the verge of going bankrupt.

Sheraz’s father, Tarak, who started Quiz in 1993 with just one store in Glasgow, gave the business an emergency loan of £1 million last summer. Quiz is now frantically looking for additional finance, probably on harsher conditions, as HSBC is apparently unwilling to continue backing the company.

In contrast to its £2.3 million profit the year before, Quiz reported losses of almost £7 million last year. The job of leading the retailer through its turnaround has been placed on chair Peter Cowgill, a former manager of JD Sports.

In the upcoming weeks, a formal announcement on the company’s future is expected.

With Poundland and now Quiz are we going to see a string of retail failures?  At least a CVA gives the company a good chance of continuing to trade