Quiz Share Discussion Threads

[transhoneyqueens] 10/4/2019 23:18

10p - 15p range after the next warning 👻

[transhoneyqueens] 10/4/2019 23:18

10p - 15p range after the next warning 👻

[dangersimpson2] 10/4/2019 21:47

See my calculation above. Likely to be about £4m revenue hit or about 3% of revenue as a mid case based on 40 store closures, 2/3rds of them with concessions. Not convinced it would make a big difference to profits, but open to other interpretations.

Whether they can get the range and marketing right this year, so they can return to the level of growth they are staffed for, is a much bigger issue than a 3% revenue hit from losing a few Debenhams concessions at some point in the future.

[hamidahamida] 10/4/2019 16:55

Concerns about how many concessions will be closed due to Debenhams downsizing and related revenue and profit loss

[robo21] 10/4/2019 15:08

Popped in to read up on company news
Another boohoo ??
Has the share price chart been posted upside down!!!
.

[hamidahamida] 10/4/2019 14:38

This needs to revisit recent lows to flash sellers

[hootza616] 10/4/2019 11:06

ASOS up after posting 87% drop in profits! BOO also rising.Come on Quiz!

[lukehold] 09/4/2019 20:00

https://uk.trustpilot.com/review/www.quizclothing.co.ukNumber of reviews and speed of replies are encouraging. Around 30 today.Worth a comparison with ASOS. https://uk.trustpilot.com/review/www.asos.com2.6b mkt cap vs 22m / 32 pe vs 3.2 pe

[dangersimpson2] 09/4/2019 15:52

I think the Debs RNS linked is quite clear on this if you read it (with my emphasis added):

· Administrators have been appointed to Debenhams plc (in administration) (the "plc") only.

· The underlying Group operating companies (the "Group") are unaffected and all businesses are continuing to trade as normal.

· The Group's commercial relationships with suppliers, employees, pension holders and customers are all with the operating companies. Therefore, none of these stakeholders are adversely impacted by the administration.

...

· The Transaction delivers continuity for all Group operations and was in the best interests of the Group's creditors, employees, customers, pension holders and suppliers.

· The Group will continue to implement the restructuring of its operations, including optimising the store portfolio (in line with plans already communicated) to improve trading performance and deleverage the business.

Think this is pretty clear. They will be paid for everything traded through their concessions, and in the short term all concessions will trade as normal.

Medium-term there will be managed closure of about 40 Debenhams stores. 2/3rd of Debenhams stores have Quiz concessions, so mean case is for this to cost 0.66 x £150k x 40 = £4m in reduced revenue, or 3% of total. I would expect these stores to be the least profitable for Quiz if they are the least profitable for Debenhams, so the EBITDA impact to be negligible.

There are genuine challenges that this business needs to urgently address in order to turn its fortunes around, but Debs concessions are not one of them.

[mnomis] 09/4/2019 13:01

See comments from Dangers2, who is on the money - Ashley gets nil for his £150m, suppliers get paid ... this imho removes a big chunk of uncertainty.

[stemis] 09/4/2019 12:48

You would imagine QUIZ are waiting from final figures from their concessions to see how much they are owed by DEBS. Surely there will be an announcement in the next few days?

[barvin] 09/4/2019 12:23

Surely QUIZ must finally get round to addressing the elephant in the room. As likely a couple of million owed to QUIZ has just gone up in smoke.

[dangersimpson2] 09/4/2019 12:09

Debs goes to administrators as a trading entity as expected:



Suppliers unaffected. This is better for QUIZ than the Mashley takeover offer would have been. Number of concessions will no doubt be affected by store rationalisation, but I would be surprised if the least profitable debs stores make much for Quiz.

Biggest issue now is can they adapt their range to the latest trends, and improve marketing effectiveness, to return to growth.

[mnomis] 08/4/2019 16:12

I picked up a few on Friday and a few BON to double down on my "stupidly cheap" or "stupidly purchased" out of favour retailers ...

PS thanks for the analysis DangerS2

[lukehold] 07/4/2019 15:22

I'd expect to see some consolidation of these debt free online competitors over the next 18 months

[lukehold] 07/4/2019 15:14

Asos p/e 32, Boo p/e 68, Quiz p/e 3

[transhoneyqueens] 07/4/2019 14:44

I'm looking to enter at 14p level or wait for the next profits warning ? Going be some big shorts soon

[lbo] 07/4/2019 09:17

https://www.thetimes.co.uk/article/asos-in-a-spin-over-profits-v0bsbnxbl

[dangersimpson2] 05/4/2019 20:52

Not guessing, estimation.

You have to read the admissions document to get an idea of the breakdown between stores and concessions, since they don't break it out any more.

In 2017 QUIZ's 148 concessions generated £24.1m revenue = £162k per concession, on average.

Their 73 stores generated £33.3m, or an average of £456k per store, almost 3 times the amount.

QUIZ now have 110 debs concessions vs 101 at listing. I doubt per concession vs per store proportion of sales has changed significantly, but I am open to arguments why you think this may have changed if you have better information?

I'm also not suggesting that debs concessions have lower GM than anything else, just that the overall GM is down vs the 60%+ last year, we won't know what it is until results but 50% is a fair estimate IMO.

Debs have publicly blamed low footfall for their woes, so I don't think it is unreasonable to estimate that per concession revenue is roughly the same as 2017.

The debs concessions may be quite profitable, but if that is the case, due to the above, that will almost certainly due to debs letting them have the space for next to nothing. This is the real unknown in all this. And I don't mind if there are profitable TBH, the chance of them being ditched by debs has gone down significantly with recent events. I'm not convinced that being associated with debs as a brand will be a great move going forward but as described above I think there are some benefits even if the debs concessions don't contribute much to the bottom line.

[stemis] 05/4/2019 12:15

That's just guessing though isn't it. Last year UK physical sales were £64.6m and they had 71 shops and 147 concessions. So that's ~£300k per unit. Have you got any grounds for believing that average sales per unit is lower for Debs concessions than any other unit?

Have you got any grounds for believing margin is lower in Debs concessions than any other unit or on-line?

I'd have though the cost of running a Debs concession is less than running a shop. Isn't that the rationale for concessions? Economies of scale across the different concessions.

I know people would like Debs concessions to be less profitable so that if they are lost the impact isn't that much. But I don't really see the evidence that this is so (but similarly that it isn't - I just don't know).

[dangersimpson2] 05/4/2019 11:13

I reckon max £20m debs concession revenue. 110 debs concessions = £182k revenue per concession, 50% GM due to discounting = £92k Gross Profit. Maybe they get a very good deal from Debenhams, but surely Debs want more than £90k pa per store to provide a concession area and staff it?

All guess-work, but can't be that far off. They do say that new concessions pay back in 12 months or less, so maybe they do get such a great deal form Debs simply to fill the store.

One thing that is probably underrated is the ability for people to pick up for free from a store and 110 debs concessions gives them nationwide coverage. With debs potentially closing up to 50 stores the benefits start to go away though.

[stemis] 05/4/2019 10:34

I don't see why you think DEB concessions don't make much money (apart from nowhere in QUIZ makes much money)? Personally I've no idea but I don't see where the evidence is.

[dangersimpson2] 05/4/2019 10:12

D&A for H1 was £1.7m so assuming similar rate for H2 and EBITDA guided at £4.5m for the FY there will probably be a small £0.5-1m profit. Of course this means H2 was loss making, by about £1.4m EBITDA and maybe £3m LBT, so less than impressive.

We know they ramped-up costs in anticipation of sales growth that never came, which then combined with discounting led to a deterioration of gross margins, some brexit related, and some simply getting the range wrong. This has taken the company from forecasting a strong profit to close to break-even, and more than a 90% drop in the market cap.

I doubt we will see insider buying. If they are not already in a close period they will be in the next few days. Not sure any exec directors could buy either, given the size of their existing holdings. Although it is spread across family members, I expect that they would be considered a concert party, forcing a mandatory bid at the current SP, which would be unsuccessful but a waste of time. Non-execs could have bought without triggering this, but this again isn't necessarily a positive sign given that the Chairman runs the most likely company to make an offer, if one ever came.

The positives are:

- that before things went wrong they had a very healthy gross margin of 60%+, higher than many retailers that are considered higher quality. So if they can either deliver the growth they have staffed for, or cut costs back to meet more modest expectations, they should have a profitable business again. One thing that will be key is to get their range and marketing campaigns right, the management should focus pretty strongly here IMO.

- They have the cash to see them through this period of poor trading so there is very little risk of insolvency in the short to medium term, giving them plenty of time to turn things around. I expect those who think so based on inferring a cash-burn from the last two trading statements don't understand working capital cycles.

- The immediate loss of Debenhams concessions looks unlikely. Debs management have told Mashley to go jump, and the company is likely to end up in the hands of the bondholders but as a trading entity, although with shareholders diluted to almost nothing. This means concession revenue will continue to be paid, and QUIZ will have been paid the important Christmas revenue by now. Long-term they are probably better off without the Debs concessions since I doubt they make much money, but in the short-term losing them due to either Debs admin, or Mashley kicking them out due to his rivalry with QUIZ chairman Peter Cowley, is likely to be a distraction management don't need at this time.

- Speaking of Cowley, JD Sports have been quite acquisitive lately. FOOT is a much better fit than QUIZ on product line, but QUIZ is a much better business on metrics such as gross margin & profitability, even in current weakened state. If they paid a similar EV for QUIZ it would be 72p per share. This is still obviously a highly unlikely outcome, but the FOOT example does show how big the difference between market price and industry value can be.

So in summary, despite the very poor recent half year, I don't think it is quite as gloomy as the current share price predicts.

[woozle1] 05/4/2019 08:45

I will buy when I see some insider buying

[yashdi] 05/4/2019 08:26

It all depends if Y/E 31st March 2019 is a profit or loss if a profit after tax is a profit then this is still a bargain at current prices, I think market is expecting a loss.