Ted Baker says ecommerce sales grew by a third in the early weeks of the summer – but sales at its reopening stores fell by more than three quarters, with the result that its overall retail sales were 50% down on the same time last year. Once stores were open, like-for-like sales were still running at 50% of the same time last year.
The lifestyle retail brand today said that 69% of its sales took place online during the 11 weeks from May 2 to July 18 as ecommerce shot up by a third during a period in which Covid-19 lockdowns started to ease and its stores started to open. During the same period last year, 25% of sales were online. But store sales fell sharply at the same time. The figures give an indication of the scale of the shift from store to online that has taken place even as stores started to reopen from lockdown.
Group revenue came in at £60.9m over the 11 weeks (-55% on the same time last year). Total retail sales came to £51m (-50%). Online sales rose by 35% to £35.2m, while store sales fell by 79% to £15.8m. Store reopenings started from April 29 and by July 18, 95% of Ted Baker’s stores were open, with 75% having operated for the last four weeks. At those stores, like-for-like store sales were down by 50% on last year on the last four weeks of the trading period.
Wholesale (-75% to £7.4m) and licence sales (-29% to £2.5m) were both down. Where sales have risen – online – Ted Baker says that’s been as a result of discounting that was in line with the market, and through increased engagement on social media and targeted digital marketing activity.
Ted Baker chief executive Rachel Osborne said she was pleased with the progress made since the brand launched its transformation plan in June. “Our customers are engaging with the brand and responding to our Covid-19 promotional activity, as evidenced by our resilient trading over the past 11 weeks,” she said.
“Our performance is encouraging, but I caution that it is still early days and we have a substantial amount of work to do over the next 12 months against a backdrop of significant uncertainty in the world. However, the brand has an exciting future and I am looking forward with cautious optimism that the initiatives currently underway across all areas of the business will bear fruit over the next 12 months.”
The update comes a day after Ted Baker confirmed that it was consulting staff on plans to cut at least 500 jobs as part of transformation measures taken in response to the shift from stores to ecommerce, which has accelerated as a result of Covid-19.
The job losses come as the retailer is cutting its costs in the light of the shift in customer buying habits, who have bought less from store and more online. In today’s AGM statement, Ted Baker said it had reduced its supplier list from more than 150 to fewer than 100 while reducing its stock buying cycle from three years to two years. Capital expenditure has reduced to less than £10m from previously expected £15m, while the redundancies are part of a £15m cut to operated expenditure. The company has also taken steps to improve its retail store profitability, both by reducing payroll to save £12m a year, while negotiating rents down with landlords to the tune of £3m so far. Overall, it expects to save £16m on rents in the next financial year. In recent weeks Ted Baker has reduced its net debt to £116.3m, excluding cash raised through a fundraising and has cash of £161.7m available. Measures taken include the sale of its headquarters building.
Ted Baker is a Top250 retailer in RXUK Top500 research.