British fashion retailer Quiz said today it would place its stores unit into administration and then buy the business back so it can try to renegotiate better rental terms.
Bricks and mortar retail in the UK was facing a major structural challenge prior to the outbreak of the coronavirus pandemic with the economics of operating stores on traditional leases proving increasingly difficult.
Quiz's 82 standalone stores in the UK and Ireland, operated through its subsidiary, Kast Retail Limited, have struggled and have been closed since March 22 as part of the national lockdown.
The group, whose shares have fallen by three quarters over the last year, said its store estate was not financially viable in its current structure.
It will seek the appointment of administrators from KPMG to Kast and to subsequently acquire from the administrators the business and certain assets of Kast for £1.3m.
Following completion of the acquisition, Quiz expects to renegotiate the lease arrangements for the majority of the stores.
"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," said CEO Tarak Ramzan.
Quiz has outlets in Dublin, Cork, Limerick and Belfast.