Ted Baker says it has taken a capital-light, omnichannel approach to growing its sales. Today it reported a 20% improvement in revenue and a narrowing of its losses in its latest full-year. Store sales have improved while ecommerce is behind where it was in 2021, when lockdowns closed non-essential retail stores in the UK and Europe, but ahead of pre-pandemic levels.
The fashion and lifestyle retailer has launched a new digital platform that it says will be the foundation for an integrated digital retail approach. The new platform is intended to improve the customer experience through cleaner design, machine-learning driven search suggestions, and ‘lazy loading’ to encourage scrolling. Taken together, these changes are intended to lead to higher conversion and digital sales as well as more efficient digital marketing.
At the same time it has taken short-term leases over its latest financial year to test whether new stores would be viable in locations including Bromley, Leicester and Exeter. It has also signed an agreement with franchise partner Robert Godard, which will now open new standalone Ted Baker stores that will be stocked through a wholesale franchise relationships. During the year it closed 15 shops and opened seven, whole renegotiating lease terms and its relationships with House of Fraser moved from a concession to a wholesale model.
The update came as Ted Baker today reported group revenue of £428.2m in the year to January 29 2022. That’s 20.5% up from £355.3m a year earlier. Of that, £301.9m (+17.2%) was from retail – £168.1m from stores and £133.8m from ecommerce – while £111.2m came from wholesale and £15.15m from licensing.
Ecommerce sales were 12.7% up on the same time two years ago, but 9.7% behind last year, when lockdowns were in place for a longer period of time. In all, 44.3% of retail sales were online, down from 57.5% in the previous year. Ted Baker says it has had strong online sales through third-party retailers including John Lewis and Next. Store sales were 62.4% up on the previous year.
It reports a pre-tax loss before one-off costs of £38.4m, improved by 35.1% from a loss of £59.2m last time. After one-off costs of £5.6m, at the bottom line, it reports a pre-tax loss of £44.1m, down from a loss of £107.7m a year earlier – representing a 59.1% improvement.
In the first quarter of its current financial year, group sales were 20% up on last year, with retail 28% ahead. Sales in its stores were 137% ahead, while ecommerce sales were down by more than a third (-36%). Wholesale grew by 2%, and licensing by 40%. Spending, it says, has recovered as workers have returned to the office, and social events have restarted.
The retailer says it has “partially mitigated” the impact of Brexit by opening a customs warehouse in the UK in April 2021. The largest effect of the new trading relationship with the UK has been on the flow of goods into the UK and distribution into Europe.
Ted Baker is currently looking at the possibility of its sale to an as-yet-unnamed bidder, and is currently going through a due diligence process.
Rachel Osborne, Ted Baker chief executive, says: “We continue to make good progress against our Transformation Plan, helping us deliver strong sales momentum through the year as we focus on driving Ted Baker’s growth as a global lifestyle brand.
“That momentum has continued into the new year, supported by a steady return to the office and social events. While we remain mindful of what is a challenging macro environment, we are well positioned for growth. The positive response to our SS22 collection and the recent launch of our new digital platform, supported by our strong brand, capital light strategy and well-established distribution channels give us confidence in Ted Baker’s future.”
Ted Baker says it is making its supply chain more transparent while using more sustainable materials and practices. It has relaunched its ecommerce packaging and bags to be fully recyclable and FSC certified. By 2025, it aims to have 100% sustainable customer packaging, with paper packaging made from recycled materials. Information about sustainability and materials is now included on its product labelling.
Ted Baker has stopped shipping wholesale to Russia following its invasion of Ukraine. Sales to Russia, Ukraine and Belarus previously accounted for less than £1m a year. The retailer has sent clothing to the Polish and Ukrainian border and donated £25,000 to the Red Cross, while enabling its staff to volunteer.
Ted Baker is ranked Top100 in RXUK Top500 research.