Ted Baker today says its transformation plan is on track despite a 47% drop in sales during the Covid-19 pandemic.
Group revenue and retail sales both fell by 47% during the 13 weeks from November 1 to January 30, the fourth quarter of its financial year.
The retailer, ranked Top50 in RXUK Top500 research, says the fall in sales reflects the temporary closure of its stores during lockdown, as well as some permanent closures where “commercial lease agreements could not be reached with landlords”. The retailer is now assuming a negative impact from store closures that will last until the end of May.
Some 63% of its sales took place online during the period. Its own online sales were 2% ahead – reflecting a lack of demand for coats and occasionwear. Group ecommerce sales were down by 1% overall - including those via third-party websites. But Ted Baker brand web traffic rose by 17% and new customer numbers grew by 8%, with demand rising for its casual wear, with sell through rates have been above average for tops, trousers, accessories and footwear.
Wholesale and licensing revenue has also fallen, by 44%, reflecting “cautious ordering” from customers with stores during Covid, and Brexit-related shipping delays towards the end of the period. The retailer has now signed Bedeck as a new licence partner for bedding and towels.
Sales are growing faster in its China, Hong Kong and Macau joint venture (+14%) and on mainland China (+33%).
The retailer says its digital and asset light growth strategy is making good headway.
Ted Baker chief executive Rachel Osborne says: “We continue to make strong progress on our transformation programme, delivering against all of our year‐one operational targets. Over the period, we have moved forward on the three key pillars of our plan in refreshing and re‐energising the product and brand, prioritising digital and capital light growth with the announcement today of a further licensing partner and through our cost savings programme.
"While we have made encouraging strategic progress, trading over the fourth quarter was difficult and heavily impacted by the Covid pandemic, leading to the closure of many of our stores during the period and a lack of demand for outerwear and occasionwear over the festive season in particular. Looking forward, we are taking a cautious planning approach and now assume that UK stores will remain closed until the end of May followed by a gradual recovery over the rest of the first half.
"Despite these challenges, our robust balance sheet and strong cash position leave us well placed for the future and we remain confident that Ted will emerge from Covid a stronger and more resilient business."
The retailer says: “Following the trade agreement between the UK and EU signed in late December 2020, the group anticipates up to £5m of incremental costs associated with Brexit, reflecting extra duty and shipping costs partially offset by a new customs warehouse capability.”
The retailer says it has £199.7m available in liquidity, including £66.7m cash and £133m in potential borrowing, as yet unused.