Fashion retailer Quiz is putting its store estate into administration, with plans to restructure its loss-making 82-store estate by buying them back.
The group’s stand-alone shops in the UK and Ireland are operated through subsidiary Kast Retail. Quiz plans to buy “the business and certain assets” back for £1.3m.
No leases will be bought by Quiz’s new vehicle, which will only buy assets including stock, fixtures and fittings, contracts and associated vehicles as part of the deal. The employment contracts of 822 of Kast’s 915 employees will transfer to the new subsidiary.
Following completion of the deal, the group will renegotiate lease terms for the majority of its shops.
The retailer said that it “continues to believe that stores, with appropriate property costs and flexible lease terms, can be a relevant pillar in Quiz’s omni-channel model moving forward”.
Quiz is appointing KPMG on the process.
Chief executive Tarak Ramzan said: “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.
“While we have taken proactive 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.
“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 reopen 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.”
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