The Eric Musgrave Interview: Tarak Ramzan, the reclusive boss of Quiz, on dealing with the latest post-Covid challenge
Fashion is full of characters who like to hog the limelight, forever banging the drum for their business (and often themselves). There are also plenty of leaders who maintain a lower profile and quietly get on with building substantial concerns that are often largely unknown even to many in the trade.
In the first of a series of interviews with the latter type of CEO, our regular contributor Eric Musgrave, who has been writing about the industry for more than 40 years, talks with Tarak Ramzan, the founder of Quiz, the omnichannel value-driven womenswear retailer that has enjoyed annual sales of well over £100m yet is barely written about (possibly because it does not have many shops near London).
This year Glasgow-based Quiz, which employs more than 900 people, is 30 years old. In July 2017, around the time fast fashion businesses like Asos and Boohoo were in favour with corporate investors, Quiz, with JD Group’s then-boss Peter Cowgill as its independent non-executive chairman, floated on AIM, the junior arm of the London Stock Exchange. The Ramzan family netted more than £90m from the float.
The market capitalisation of Quiz briefly rose as high as around £200m but fast fashion soon fell out of fashion with the City and then Covid hit everyone. The lockdown was a particular problem for Quiz, which is all about dressy clothes to go out in.
In the financial year 2018-2019 Quiz’s turnover was £130.9m. In 2019-20 sales had dipped to £118m. By the end of 2020-21 they had plummeted to £39.7m, a fall of around 66% in 12 months.
The Quiz 74-page annual report for the year to 2023 is packed with statistics and strategy statements but here we are more interested in the boss’s personal insights and opinions.
Quietly but steadily, the business is rebuilding its position as a small plc but at the time of writing (mid-September) Quiz’s stock market capitalisation is only about £11m and the founder-CEO is now tackling the impact of the deep cost of living crisis.
The company announced it may slip into the red for the current year due to a tough trading climate in the first half to August 2023 hitting its sales. But it stressed: "Longer-term, the Board remains confident that Quiz's product proposition and commitment to providing glamorous looks at value prices will continue to appeal."
After more than 50 years in the fashion trade, the quietly-spoken Ramzan, who turned 70 in January 2023, is notably resilient and refreshingly honest about the challenges he and his team – along with many others in the sector – are facing.
Eric Musgrave: We are three-quarters of the way through 2023. How has trading for Quiz been compared to how you expected it to be?
Tarak Ramzan: We had a very tough time during the pandemic because Quiz is focused on occasionwear, going-out wear, dressy wear and holiday wear.
If anyone had asked me if any company could have survived dropping from around £130m in sales to about £50m, I’d have said no. But with a bit of Government help and doing the right things, we came out of it in decent shape. When lockdown started I said not one penny goes out of the business without my say-so. I signed every single thing off. The main thing was we came out debt-free, which was quite remarkable under the circumstances. We have always been debt-free.
Trading in 2022 was very good for us. In just a year we built back our cash reserves to almost what they were pre-Covid. We expected 2023 to be the same, with a good demand from weddings and holidays at least for the first six months. Unfortunately the cost of living crisis started kicking in around October last year. Christmas 2022 wasn’t so bad but we felt things tightening up from November. Since Christmas it’s been pretty tough.
The weather hasn’t helped. We saw a real big spike (in sales) in June (when the weather improved) but July was a wash out. But for me the weather has only exacerbated the main issue, which is the cost of living. People are not spending the way they were.
Some people have money and are holding on to it, but a lot of people don’t have the money. Mortgage rates and energy prices have gone up. The average working person lives month to month. We can see the way our sales spike at the end of the month. People are waiting for their wage. Speaking to the girls here in our head office, when it’s a five-week month, they are skint by the fourth week.
How long will it last? It’s going to go on a bit longer than people expected. Some thought there’d be an upturn this side of Christmas but now they are now saying we won’t see an upturn until the end of 2024.
QUIZ partnered with Ashley Roberts on a partywear collection
EM: How has the situation impacted on your sales?
TR: Customers are definitely going for cheaper price points. Last summer our best-selling occasion dress was £64.99, discounted from £74.99. It was flying out but we were still selling some dresses at over £100. Now anything over £100 is a lot slower. Our best-selling occasion dress for summer 2023 was at £49.99.
Last Christmas we had dresses at £39.99, £49,99, £69,99. The ones at £39.99 sold better, so for this year we have brought in more at that pricing point. We have cut our margin to some extent but we are still making a good margin. Currently we still have a few dresses at over £100, but going forward we will stay below that price.
EM: Who shops with Quiz, and why?
TR: You have to give the customer a reason to come and buy from you. If you know that reason and can articulate it, there is a chance the customer might end up knowing the reason. What we say to customers is – and it comes through in our stores and in everything we do – if you want a basic pair of jeans, vest or piece of knitwear, don’t come into Quiz. We don’t do that. If you want to dress up, want to go out, want to look the part, want to go on holiday, then come into Quiz. We’ll look after you, we’ll dress you up and we’ll do it all at great value for money.
We refined our offer to get here. When we started Quiz in 1993 we were doing a wide variety of stuff and it was very successful. We grew for one store to about 20-odd stores very quickly, but by the end of the 1990s and into the early 2000s people like Primark and the supermarkets were getting into clothing. If you were doing basic knitwear or vests you were on to a hiding to nothing because you did not have the variety a big supermarket would have, and you did not have the prices Primark would have.
We had to focus our offer on a niche where we could do well and maybe do better than other people. Quiz now caters for a wide age group. We buy for two different types of customers. Our younger customer is an under-25 year old, who wants to buy a ruched dress or a mini skirt with a coordinate to go out at the weekend.
Our core customer is between 25 and 50, (a group) that is much more fashionable than they used to be. We target our garments for the 30-35 year olds. A woman in her 30s, 40s or 50s will still wear what a 30-year-old would wear.
We have a wide age group coming into the store. I have seen three generations coming in – a 16-year-old, her mother and her grandmother and all can buy an outfit from us. We say, whatever age you are, come into Quiz and we will dress you up.
Everyone has to have a distinctive USP. Many of (our competitors) have gone out of business. Among others, River Island and Zara, for example, do a lot of dressy stock like we do but we do more occasionwear and are more value-driven than them. Next are very good retailers but we don’t particularly overlap with them – their customers are probably older and not as trendy as ours. You won’t see any shop like ours on the high street.
The Quiz store in Lakeside
EM: You always describe Quiz as an omnichannel business. You have about 60 stores and 37 concessions in the UK and a few in Ireland currently. You seem to favour shopping centres rather than traditional high streets…
TR: That’s right. You get better footfall in shopping centres. My top management and I have always believed omnichannel is the way to go, but we’ve always believed there will be a role for stores.
Our first transactional website was set up in 2005. Pre-Covid everyone was thinking shops were on their way down and online was going to take over. During Covid everybody thought that (even more strongly). I didn’t understand it. I felt people were just reacting to how things were at that moment (rather than) thinking forward.
We believed shops would still be there and I think that’s been vindicated. Especially last year online was struggling and shops were doing a bit better. This year shops have been hit as well, of course.
There’s still space for stores. People want to go out, go to shopping centres for the day, have a bit of entertainment, have a meal. There’s space for shops and online; you have to find the right balance.
On concessions, our main partner was Debenhams. We were doing £30m with them. We have taken on some concessions in New Look and in some independent department stores, We have two with House of Fraser. We could have opened more but the terms in Frasers are not particularly good. We are deliberately reducing our concessions as we are interested in opening more of our own stores.
The optimum size for a Quiz shop is 2,800sq ft to 3,000sq ft. Geographically we are strongest from Scotland down to Manchester. The most potential for new branches is the Midlands and the south. We would like to add up to 10 stores (in the near future) but it all depends on the deals we are offered. We have opened nine or 10 stores in the past 12 months. We are still expanding.
EM: In the year 2022-23 your group sales had climbed back to £91.7m. UK stores and concessions contributed £45.5m, online was £29.8m and your surprisingly extensive international partnerships added £16.4m. What are your returns like for online?
TR: Our online returns are running at about 43%-44% but they are worse on multi-brand platforms like Next and Zalando. On Zalando our returns were 80% so we pulled out. We find you have to be very careful with multi-brand websites. A lot of retailers don’t know that yet.
You are throwing your stock into a swamp. You don’t know where it is and you can’t stock-take it, which we didn’t like. Your figures never match. For our own site, we have got a good and efficient process for getting returns back on sale within 48 hours. When you hand your stock out to other people there is never the focus on handling returns there should be
EM: Quiz sells in some unexpected places, like Armenia and Central America. What is your strategy outside the UK?
TR: Starting around 2010 and 2011 we probably opened up in too many different places, with partners who were too small. Now we are concentrating on the Middle East, where we are strong, the USA, and we are looking at India. We are looking at bigger markets rather than being spread out too far.
(Trading group) Alshaya is our partner in the UAE. Our partner in Saudi Arabia is (trading group) Al Hokair, who took us to Armenia. We have just started with Macy’s in the USA – online and via wholesale – and although it’s still small we are off in a good way.
EM: What are your investment plans at home?
TR: I learnt a long time ago to be focused on cash flow. Fortunately we have always had good cash flow and so have been able to invest in the business. I believe in continuous improvement, continuous investment.
We have always been one of the first to adopt new technology. When computers came out we one of the first in Glasgow to transform our back office. We have been investing in our latest shop fit, we are investing in our warehouse, we are putting in a new omnichannel EPOS system that is costing £1.6m.
The customer is demanding we have this new technology. They want to be able to buy on an iPad, order it in Inverness and get it delivered in London. They want to be able to see what stock you’ve got, where they can pick it up, what click and collect you have. They want it online, they want to send it back, so we have to constantly invest in IT and it’s big investment.
Today we are investing to stay up to date, to stay in business.
EM: What changes did the lockdown experience force you to make?
TR: Covid made us realise we need a wider spread of products, more trendy casualwear like athleisure, jackets, knitwear. We did it but were a bit slow (to increase it). Now we are building up that side of the business and being more consistent with it.
Since the pandemic we have retained a reasonably flexible policy of working. We leave the heads of departments to organise it. We might have everyone in three or four days a week, apart from departments like buying and design, where we like them to be in five days a week.
Regarding working from home, you have to consider the youngsters, the 19 or 20 years old, who are prevented from coming in and learning from their peers. I have always believed older people in the company have a duty to impart their knowledge.
When I am talking to the buying team or the marketing team I’ll deliberately go off on a tangent to share with them some of the experiences I’ve had and you can’t do that working from home. It’s about mentorship.
EM: Your own knowledge of the industry is much wider than just retailing, isn’t it?
TR: My father, Mohammed Ramzan, came from Pakistan to Scotland in 1949, one of the first to arrive (after the 1947 partition of India and Pakistan). He was 21 years old and had £5 in his pocket. He picked Glasgow because he knew one or two people who had come here. He originally worked as a pedlar, a door-to-door salesman going up to the north of Scotland with a suitcase selling drapery products. He made enough to set up a grocery business but he didn’t like selling non-halal meat, so sold it to his partner and started a drapery wholesale business on the south side of Glasgow.
In 1960s he started a clothing manufacturing business in the city, which became quite successful. In 1971, when he was 43, he wanted to return to Pakistan to build a business in his own country, so after we had worked together for three months, he gave me the factory keys, said “You’re the boss now” and left.
I was 18. I had done one year of a pharmacy course at Strathclyde University. My father had sent me to a private school (Hutchesons’ Grammar in Glasgow) and I was a well-spoken boy who was now in charge of 25 or 26 Glaswegian working-class women from tough areas like the Gorbals and the East End.
They spoke very coarsely, f-ing and c-ing, and I didn’t like that although I soon realised it was not necessarily directed at me. It’s just the way they talked. They were very disorganised, arriving and leaving any time they wanted. I didn’t like that. I like order. The first thing I did was to install a time clock. After a year about 20 of the 26 had left or I had fired them. The last one I fired punched me on her way out of the factory.
I built the manufacturing up from about 25 people in late 1960s to, at its peak at end of the 1980s, about 250 people in one unit in heart of Glasgow. Anna Boyle, my first factory manager, became my right-hand and worked with me for 50 years until she retired a few years ago. Another one or two people from the manufacturing days still work in the company today.
By the mid-1980s the writing was on the wall for manufacturing in the UK even though I was still making a good living from it. So I decided to try my hand at running shops.
I moved into retail by taking over a few shops of a company called Clothesline, that had gone into administration. The 350sq ft unit on Victoria Road, next to Queen’s Park on the south side of Glasgow, was the first one that became available. In 1993 it was quite a busy suburban street with lots of local shops in the area.
I always had a vision of opening up a chain of stores, not just having one From the start I was quite well-financed because of the success of the manufacturing business. I put £50,000 into Quiz and arranged a £100,000 overdraft. I haven’t put a penny into it since. It’s all been self-financing.
Sheraz Ramzan is in charge of business development
EM: Six years on, how do you rate the experience of going public? Given the massive slump in the market value of Quiz, have you considered taking it private again?
TR: Broadly speaking being a public company has been what I expected but Covid has knocked it all off course. For the first couple of years we were doing pretty well and beating City expectations, then things started getting tougher and then Covid hit as well, with the slump from over £100m sales to less than half of that.
On the whole our investors, the ones that are left, have been pretty supportive. Some have sold out. I have (in Gerard Sweeney) a very good FD who handles most of (the talking to the City). I do speak to investors regularly, but it hasn’t taken up too much of my time or my focus.
Obviously it’s not gone the way we wanted it to (since 2017) but I don’t think anybody could have realised how they environment was going to change.
We have considered taking the company private again but at the moment we are happy being a plc. We want to concentrate on building the company back up and opening more stores.
EM: You were 70 in January 2023. Any plans to retire?
TR: I have no plans to retire at the moment. My elder son Sheraz, who is 42, is a director of the plc, in charge of business development. My younger son Haris, who is 33, looks after international buying, so he is very involved with product.
At some stage I’ll be handing over to Sheraz, if he fancies it.
(For now) I still enjoy it. When times are tough I don’t enjoy as much and I especially didn’t enjoy it through Covid.
At the end of the day, I love product. I have been working with product since I was 18. Through everything I have done it’s been product that turns me on.
