From a small store in the Southside of Glasgow, Tarak Ramzan has built Quiz Clothing to an international multichannel chain.
There is nothing like walking into a retailer’s warehouse to get a sense of the size and scale of the business. For Scottish fast fashion womenswear retailer Quiz Clothing, its 200,000 sq ft distribution centre on the outskirts of Glasgow is a point of pride. The result of a £3m investment, the cavernous facility can hold up to 600,000 hanging garments – it has the capacity to increase this to 2 million – and service 1,000 stores and concessions.
The space was needed. Steered by its founder and managing director, Tarak Ramzan, Quiz has been quietly stepping up its retail footprint in the UK and Ireland. It opened 40 stores and concessions in 2016, bringing its total worldwide to more than 300. A further six stores will open during the first quarter of 2017. Meanwhile, it is expanding internationally and the online business is booming.
In the first year 20 staff had been fired or left. The last one punched me on the way out
Born in the Southside area of the city, the softly spoken, self-made Ramzan is not one to crow about his successes. As a result, Quiz is one of fashion retailing’s best kept secrets: sales rose 11.8% to £87.4m for the year to 31 March 2016, while its pre-tax profit grew by 17% to £5.7m – and it is on track for turnover to top £100m this year.
Ramzan began his career as a manufacturer. His father moved to Scotland from Pakistan in 1947 and set up a small business making duffle coats and tartan pinafores. When he decided to move back to Pakistan, Ramzan – who had “always wanted to do business” – agreed to take over. At the tender age of 18, he inherited responsibility for a team of 30.
He quickly recognised a need to tighten up the operations.
Quiz warehouse 2706
“They’d been used to my father’s lax way of working,” he recalls. “They used to come in any time they wanted. The first thing I did was install a time clock. It was a bit of a rollercoaster ride. Out of the 30 people that were working there, in the first year about 20 had been fired or left. The last one punched me on the way out.”
It was a steep learning curve, but over the ensuing years he began to build the business. At its peak in the late 1980s, it employed about 250 people, by this time manufacturing fashion separates. But then the market began to change.
“At that time there used to be lots of clothing factories in Scotland and there used to be lots of head offices of big retailers in Glasgow, so there was business to be had,” says Ramzan. “But gradually the retailers started moving down south and manufacturing began shifting offshore.”
Realising the need to evolve the business, he tried to set up a base in Pakistan. It did well initially, but changing government policy made it unsustainable. A subsequent attempt to set up in Turkey failed.
“After that I thought, ‘I need to do something else’. Manufacturing was getting more and more difficult.”
So he decided to try his hand at retail. With £50,000 in the bank from the manufacturing company and a £100,000 overdraft, he set up Quiz. The first store opened on Glasgow’s Victoria Road in 1994, measuring around 500 sq ft. From there the business quickly grew.
We were always good retailers – we just had problems with some of the legacy leases that we had
At the start, Quiz was more of a general value fashion retailer, selling own-label jeans and knitwear – “all the things you can buy at Primark now for a tenner,” says Ramzan.
Fast fashion competition
But as Primark and New Look burst on to the scene, Ramzan was faced with a dilemma: “We were up to about 25 to 30 stores and realised at that stage that we’d have to reassess the business. I sat down with the management team and thought, ‘how can we compete with Primark, New Look and all these other discounters?’ They had a lot more buying power than us. We decided the best way to compete was not to compete but to do something different.”
Quiz olivia buckland
Ramzan spotted a gap in the market for affordable evening and occasionwear, targeting women in their twenties and thirties: “Clothing is so competitive. Either you can become a category killer or compete on price, or you have to occupy a niche and do it better than other people. If you can do that, it gives people a reason to buy from you.”
“They are very clear who their target customer is,” observes Wendy Hallett, founder of womenswear concessions operator Hallett Retail. “They have an excellent focus on occasionwear – an area they do very well – and they do not get distracted by doing too many different categories.
“From what I can see, they know which shapes, colours and styles work well for them and they back them with real depth rather than doing too much width and ending up with lots of fragmentation.”
In the late 1990s, Quiz made another strategic shift: moving its stores from under-pressure high streets locations into shopping centres.
“Shopping centres are where most people go, because they’re covered and it rains so much here,” laughs Ramzan.
There’s a huge shopping culture in the Middle East. Most forms of entertainment revolve around shopping centres
However, this came with its own risks. Shopping centre landlords held a lot of power, rents were high and leases long. Then, the 2008 credit crunch hit and Quiz began to struggle with underperforming stores. In March 2009, part of the business went into administration. Ramzan bought it back that same day in a pre-pack deal, which allowed it to exit some of its more onerous leases, and preserve jobs.
“We were always good retailers – we just had problems with some of the legacy leases that we had,” he argues. “We paid all of our suppliers and brought them on board with us, and the company’s been flying ever since, which is testament to our business model. A lot of pre-packs have not been successful because they were weak retailers in the first place.”
Today, Quiz has flourished into a truly multichannel retailer with a strong portfolio of concessions and international franchise stores, as well as a thriving online business. The website launched in 2005 and was profitable from its first year. Online sales represent 12% of total revenue, but there was a big spike in the run-up to Christmas – of 75% between 1 October and 31 December 2016. This is thanks to a combination of factors, including the fact it has a separate team for every channel, “so they’re all very focused”.
Quiz also took the decision, about 18 months ago, to invest more in its digital marketing. It launched its first celebrity collaboration, with The Only Way Is Essex star Danielle Armstrong, in October 2016, and a second with Love Island’s Olivia Buckland quickly followed.
“Both of those have been very successful and that’s given us the impetus to do more next year,” adds Ramzan. “The marketing and product is coming together and that’s why we’re seeing the growth online.”
If someone else can build a global brand, why can’t we?
Digital is connected to its bricks-and-mortar estate through click-and-collect and in-store iPads for customers. The next phase will be to explore the use of digital screens and kiosks where customers can go online, as well as the introduction of wi-fi in stores. To accommodate these changes, Quiz is turning its attention to bigger units – up to 3,000 sq ft, compared with its previous average of 1,500 sq ft.
“Years ago customers didn’t care how good your computer system was and whether you have tech in stores,” says Ramzan. “They didn’t care about magic mirrors and having places to take selfies. Now they want the latest technology.
International is another fast-growing side of the business. The first international franchise stores opened in Dubai and Saudi Arabia in 2008. Quiz now trades in a total of 20 markets, including Saudi Arabia, Pakistan, Egypt, Singapore and Malaysia through a mix of concessions, franchise and online. To date, it only operates its own stores in the UK and Republic of Ireland, although that is under constant review.
“There was a strong initial reaction to the brand,” says Sheraz Ramzan, the eldest of Tarak’s four children, who joined Quiz in 2003 and is now business development manager. “There’s a huge shopping culture in the Middle East. Most forms of entertainment revolve around shopping centres so footfall is huge and there’s great demand for fashion. A brand like Quiz flourishes there because there’s new product arriving all the time.”
Quiz is now in talks with a department store to open concessions in the Middle East. It has also recently moved some of its business to a consignment model, whereby the UK team controls the inventory across different markets. Local US and Australian websites will launch this year, as will local language sites in some yet-to-be-confirmed non-English-speaking countries. There is potential for growth in all its existing territories and more, says Tarak.
“Just last week we sent our first consignment to South America and we’ve made some contacts there who’ve stores in Honduras, Costa Rica, Guatemala and Peru. We sent some product there a couple of months ago and there was a very good reaction. Now they want to convert some of their stores into Quiz franchises, so we’re in discussions to do that. These are things I’d never have thought of when I first started retail – but I’ve always been of the mind that anything’s possible. If someone else can build a global brand, why can’t we?”
Things that de-risk fashion are your epos and point of sale systems, and your business model
Ramzan Snr clearly loves retail – “a fascinating, exciting business”: “The good thing with retail is you can get a product, put it in [stores] on a Friday and by the Monday you know whether it is working or not. I enjoyed manufacturing, but I can’t say there were ever days when I couldn’t wait to get into work. In retail over the years, there have been many days when I couldn’t wait to wake up and get back in.”
That said, manufacturing taught him some useful lessons, such as the importance of good data. Two years ago Quiz spent £1m on a new epos system, and Ramzan can easily justify the investment: “Fashion has always been a risky business. I liken it to betting on horses – you have 10 dresses in front of you, which is going to be the winner? Gradually you develop an instinct and an eye, but it is still risky. Things that de-risk fashion are your epos and point of sale systems, and your business model.”
The fast fashion model certainly seems a good bet. Peers such as Missguided and Boohoo are enjoying phenomenal year-on-year growth, as they can react more quickly to changing tastes and weather patterns. At Quiz, lead times range from two to six weeks. When Drapers visits, the warehouse has just taken delivery of 13 new styles, which are due to drop into stores the next day.
“I read that Inditex can get designs into store in 25 days. I reckon we’re faster,” boasts Sheraz.
We still want to offer great pricing, so we’ve concentrated more on sourcing and making sure we keep our price architecture
Its main supply base is China, but Quiz also sources “a fair bit” of less-detailed garments from the UK, and some from eastern Europe, India and Bangladesh. Like many, Quiz is looking at where it can make savings in its supply chain to counter the post-Brexit vote drop in the value of sterling.
“We still want to offer great pricing, so we’ve concentrated more on sourcing and making sure we keep our price architecture,” says Ramzan Snr. “There may be some things we have to put up, but overall I think we’ll be able to maintain the level of prices we have now.” Current retail prices range from £15 for a “going out” top to £90 for a sequinned maxi-dress.
However, he largely brushes off concerns about challenges ahead: “I can remember so many years of people saying it’s going to be really tough. For me it always boils down to having the right product and getting it to the customer in the right place at the right price.”
Ramzan is a capable and confident retailer, whose experience in the ailing UK manufacturing trade has taught him a valuable lesson: to keep moving, adapting and investing. With him at the helm and a growing online and international business, Quiz looks set for another strong year.
Quiz by numbers
- £87.4m annual turnover
- 350 stores and concessions worldwide
- 1,500 employees
- Target age: 15 to 35 year olds
- 200,000 sq ft of warehouse space