FASHION brand Quiz said its sales were improving and it remained confident in the group’s future as it reported widening losses and confirmed a 66 per cent drop in full-year revenues to £39.7 million.

“The last 18 months have been truly unprecedented and presented challenges to the business which would have not appeared previously credible,” chief executive and founder Tarak Ramzan said in the company’s final results for the year to 31 March 2021.

The Glasgow-based business, which specialises in occasion wear and has 17 stores in Scotland, reported underlying losses before tax of £9.6m, compared to losses of £3.1m the previous year.

Peter Cowgill, the company’s non-executive chairman, said the lifting of restrictions on events and social gatherings was fuelling increasing demand for Quiz’s core products.

He added that this was driving a return “towards the revenues generated prior to the pandemic” on a like-for-like basis – meaning before the impact of one-off events like store openings or closures is accounted for.

In the five months between the 31 March year end and 31 August, the group said it had achieved sales of £30.6m. This was £17.4m more than the revenues generated over the same period in 2020.

“This was driven by the performance of our own website and our more flexible and economically viable store portfolio,” Mr Cowgill said.

After the first Covid-19 lockdown last March, Quiz restructured its store portfolio to be more “economically viable.” Sixty six of the group’s previously operated 82 stores have now reopened, with more flexible lease terms and an average lease length of 24 months.

This will give Quiz more “flexibility going forward,” the company said.

Quiz has also significantly cut the number of in-store concession it operates on other shop floors. It cut these from 156 to 119 during the financial year, and has since closed another 74, leaving 45 concessions operating. This decline “reflects the closure of concessions that were generating little return or were operating at a loss,” Quiz said. It also reflects the closure of two store chains – Debenhams and Outfit.

Going forward, Quiz said it would rely less on third parties like concessions and generate more revenues from its own stores and websites, “which have traditionally generated higher returns than other revenue streams.”

Online sales offer “significant long-term growth potential for the group,” Mr Ramzan said. In the 2021 full year, online sales represented 55% of group revenues, up from 32% in 2020.

International sales – which represent 19% of Quiz’s revenues – also offer potential for “low-risk, low-cost” expansion through routes like online and in-store concessions.

The company said its ‘decisive actions’ in response to Covid had cut underlying operating costs by 47%.

“We have sought to manage and reduce costs wherever possible,” Mr Ramzan said. “Substantial cost savings have arisen from the renegotiation of rental arrangements for stores, the reduction of staff numbers at head office and across the business and the curtailment of marketing spend when demand for occasion wear had significantly reduced.”

Staff numbers across the group fell from average monthly employee numbers of around 1,700 in 2020 to around 1,500 in 2021. Quiz has 350 staff in Scotland.

Mr Ramzan said he was grateful for the “talent, professionalism and dedication” of his colleagues and said developing the Quiz brand remained the group’s long-term strategy.

The final results show directors’ remuneration – pay and rewards – of £624,000 – down from £675,000 in 2020.

As of 28 September 2021, the company said it had cash in the bank of £6.2m – not including a £3.8m bank loan – and undrawn banking facilities of £2.4 million.

“With the recovery in revenues experienced to date, the group anticipates generating a positive cash flow from operating activities in the year ended 31 March 2022,” the company said.