Quiz has revealed it is placing the division that runs some of its loss-making stores into administration.
Quiz said that in order to “protect the future” of the company it has decided to appoint joint administrators from KPMG to the group’s 82 standalone stores in the United Kingdom and the Republic of Ireland, which are operated through its wholly owned subsidiary, Kast Retail Limited.
However the group added it is proposing to subsequently acquire from Kast – acting through its administrators – the business and certain assets of Kast for a cash consideration of £1.3m funded from the group’s existing cash resource.
As part of the acquisition, the employment contracts of 822 of Kast’s 915 employees will transfer to Zandra under the Transfer of Undertakings Regulations 2006. The remaining 93 jobs will be at risk of redundancy.
Following completion of the acquisition, Quiz said it expects to renegotiate the lease arrangements for the majority of its standalone stores where appropriate leases can be secured on a “flexible basis with rents commensurate with revenues generated”.
Tarak Ramzan CEO 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.”
He added: “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.”