Ted Baker says the Covid-19 pandemic has made it a more digitally-focused business, and it is now selling more online than before the pandemic but less than it did a year earlier. In the UK and Europe, 56.2% of its retail sales took place online in the first 28 weeks of its financial year. The retailer predicts that Brexit will hit its bottom line by £5m.
The luxury fashion and lifestyle brand says while its ecommerce sales have fallen since last year, its profitability has improved. At the same time, footfall to its stores in travel locations and in city centres remains lower than before the pandemic, and it has now closed a net six of its own stores as well as 28 concessions in branches of House of Fraser, which it now supplies on a wholesale basis.
Ted Baker says its new ecommerce platform, part of its ongoing transformation plan, is now set to be relaunched early next year, following some technical delays. It says it now has an “ambitious digital roadmap” for both direct-to-customer online sales, and those through third party businesses. That roadmap includes micro services and fast integration with marketplaces as it looks to boost mobile conversion.
The update came as Ted Baker, ranked Top50 in RXUK Top500 research, today reported revenues of £199.3m in the 28 weeks to August 14. That’s a 17.6% improvement on the same time last year, although sales are still more than a third lower (-36.4%) than the same time in pre-pandemic 2019. Retail sales improved by 10.4% to £136.9m, while ecommerce sales fell to £63.6m, down 14.2% on last year but 22% ahead of 2019. In the UK and Europe, 56.2% of its retail sales were online, as were 29.4% of sales in the US. Wholesale sales of £55.5m were 40.6% up on last year.
Pre-tax losses of £25.3m are more than halved (-70.7%) from losses of £86.4m a year earlier, although remain 10.1% behind where they were in the first half of 2019.
Ted Baker chief executive Rachel Osborne says: “I’m pleased with the continued progress we’re making, as we return to revenue growth, and make big strides back towards profitability. The brand remains healthy, delivering a stronger full price mix alongside encouraging early reactions to the new collection. The pandemic continues to impact the global retail environment, yet despite this we are delivering against our Transformation Plan. I remain confident that our turnaround of this great global lifestyle brand is on course and that Ted will emerge as a stronger business.”
The retailer says it is making good progress towards its target of 75% of its cotton from sustainable sources this year, and that it has now set carbon and climate targets, representing a 46% in carbon emissions, and submitted them to the Science Based Targets Initiative. It is using recycled materials in its clothing and aims to use fully sustainable customer packaging by 2025.
It has mapped its supply chain and become a member of Sedex in order to monitor and improve global supply chain conditions. However, it says that it has turned to air freight recently as it looks to avoid the supply chain disruptions seen in shipping.
Ted Baker now sells online and from 377 stores and concessions around the world, including 97 in the UK.
Ted Baker expects that Brexit will hit its full-year profits by £5m. The main effects of Brexit on its business, it says, have been the flow of goods into the UK through ports, and from the UK into Europe. It has also been affected by EU rules of origin and by VAT rules.
The retailer set up a customs warehouse in the UK, which became operational in April 2021, following the end of the transition period. This, it says, has “partially mitigated” the higher duties it now has to pay. It now plans to reflow the inventory that is destined for its EU shops.