With sales in the cost-of-living doldrums and cash balances almost half of what they were six months ago, problems are mounting up at Quiz.
The challenges facing Quiz, originally set up in Glasgow in 1993 by chief executive Tarak Ramzan, are not of its own making and are taking their toll across the retail industry. Hard-pressed consumers simply have less to spend on discretionary purchases, even if they are "glamorous looks at value prices".
The company is "proactively reviewing all aspects of the business" to mitigate against the current trading environment, having spent £1.3 million in recent months upgrading its distribution centre. There has also been investment in the store portfolio with three new shops opened, one closed, and three that have relocated.
READ MORE: Quiz: Shares plunge further as sales slump continues
This has eaten into the group's liquidity which now stands at £6.4m, down from £8.3m in March. Within this, cash balances have fallen from £6.2m to £3.2m.
There is also £3.2m of undrawn bank borrowing, with the group noting that its total facility of £4m is due to expire in June of next year.
Quiz is assuming that the current trend in revenues, with sales 15.1% lower during the five months to the end of August, will continue through the remainder of the financial year which would result in pre-tax loss of "no more than" £1.5m for the 12 months to March.
READ MORE: Fashion chain Quiz gets set for the next challenge
That is not a position of strength for re-negotiating banking facilities, nor does the company's lowly share price lend much support. However, the Quiz management team has track record when it comes to getting out of tight financial corners.
When the company went into administration in 2009 in the wake of the banking crisis, Mr Ramzan and his family immediately bought back the vast bulk of the business through a pre-pack deal. And when lockdown losses triggered the 2021 administration of Kast, the Quiz subsidiary in charge of the company's physical store estate, its stock and assets were sold in a pre-pack deal to Zandra, another Quiz subsidiary, for £1.3m in cash.
Whether it will be necessary to deply such tactics again remains to be seen as Quiz waits for a rebound in demand.
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