Ted Baker today warned on full-year profits as it reported a first-half loss with sales down both online and offline. It said that its focus was now firmly on its customers, its brand and its omnichannel distribution model as it looks to move back to growth.
The fashion and lifestyle retailer, ranked Top250 in IRUK Top500 research reported
revenues of £303.8m in the 28 weeks to August 10. That’s down by 0.7% on the same time last year. Pre-tax losses came in at £23.0m, a fall of 193.9% compared to the same time last year, when the retailer reported pre-tax profits of £24.5m. The move into the red came after exceptional items of £17.4m – including £11.8m on restructuring its businesses in Asia, the £3.5m acquisition of its footwear licensee, and action to strengthen the brand – and a move to IFRS 16 accounting standards. Pre-tax losses before those one-off items came in at £2.7m, down by 110.6% from a pre-tax profit of £25m at the same time last year.
Retail sales including ecommerce fell by 2.5% – or 4.1% when currency fluctuations were discounted – to £214.5m. Ecommerce sales alone were down by 1.3% (2.4% constant currency), at £52.3m. But wholesale sales grew by 4% (+1.8% constant currency) to £89.3m. Sales were 3.1% up in North America to £63.7m (although down by 2.3% in constant currency) but down in the UK (-3.9%, £141.3m) and the rest of the world (-15.2%, £9.5m).
Ted Baker chief executive Lindsay Page said: “We are continuing to proactively manage the significant challenges impacting our sector including weak consumer spending, macro-economic uncertainty and the accelerating channel shift towards ecommerce. However we are not immune to these pressures which have impacted our financial performance during the first half of the year.”
Page added: “Despite the structural challenges and cyclical pressures on the industry, we remain confident in Ted Baker’s ability to navigate the market and further develop as a global lifestyle brand. This confidence remains underpinned by the group’s flexible, omni-channel model, the continuing strength of the brand, and the skill, passion and commitment of our talented teams worldwide.”
Ted Baker sells from 560 stores and concessions around the world, including 199 in the UK, 124 in Europe and 136 in North America.
Ted Baker says new initiatives including monthly product drops both in-store, online and to wholesale customers and shorter design lead times have proved popular with customers. It now has more than a million Instagram followers following growth of 20% on that channel. This, says Ted Baker, illustrates how its brand appeal is expanding.
It also aims to move to 100% more sustainable materials for its clothing by 2030 and says that it will pilot a circular business model in its 2020 spring and summer collections.
Ted Baker is also reaching customers through a collaboration with Next. Next will make and sell Ted Baker childrenswear in collaboration with the Ted Baker creative team. Products will be sold via Next’s retail channels and via Ted Baker’s website. “As a multichannel retailer with global capabilities and wholesale experience, Next is the outstanding partner to take Ted Baker forward in this category, which we believe brings significant opportunity for growth in the coming years,” said Ted Baker in its half-year report.
Ted Baker says ship-from-store has been very successful in the UK, enabling online shoppers around the world to buy an item no matter where it is. A new CRM system gives it a single view of its customers across channels, enabling more personalised content and customer experiences.
The retailer is taking a selective approach to store openings: in the first half it opened its first German shop in Hamburg, and added an outlet in Metzingen. It also opened a store in Detroit.
Image courtesy of Ted Baker