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Ted Baker sees new post-pandemic balance emerge between online and store

Shoppers are now buying more online from Ted Baker than before the pandemic

Ted Baker today reports second quarter revenues in recovery as it emerges from the challenges of Covid-19 – although moving on from the pandemic means its online sales are lower than they were a year ago, but still well ahead of two years ago. The luxury fashion retailer, ranked Top50 in RXUK Top500 research, says its move to a new ecommerce platform has now been put off until after peak. 

Ted Baker says group revenue in the 16 weeks to August 14 2021 was 50% ahead of the same time last year. Within that, retail sales were 30% up on last year (Q2 FY2021), but 30% down on two years ago (Q2 FY2020). And online sales were 25% down on last year, accounting for 39% of group sales – down from 67% last year – as the retailer moves on from its “aggressively promotional” discounting strategy of that period. Ecommerce sales were 17% ahead of two years ago. For context, in the year to January 30, 57% of Ted Baker sales took place online – up from 27% the previous year, suggesting that the retailer has seen a shift online, with ecommerce sales continuing to be higher than before the pandemic.

Store sales were 142% up on the same time last year, and 45% down on two years ago. Ted Baker says that footfall is still down on previous levels, as shops in cities and travel locations recover more slowly, compared with the “healthy” growth it is seeing in out-of-town and regional sites. It expects that pattern to continue in the second half of the year, as international tourism recovers slowly and the number of people going back to UK offices is still limited. Ted Baker has opened two new shops – with short term leases – in “non-metro” Bromley and Exeter, and plans another opening later in the year.  

Wholesale and licence revenues – from partners including Next and Baird – grew by 151% on last year – but are still 29% down on two years ago. 

Recovery is moving at different speeds in different markets and the retailer says that sales grew still faster than the overall 50% growth in the last four weeks of the quarter. Sales are improving as consumer confidence returns, in North American concessions and malls and in UK shopping centres, and its trading margins have improved by more than 500 base percentage points as a result of the move back towards full-price.

Ecommerce and transformation

Ted Baker is experiencing delays to the implementation of its new ecommerce platform because “some technical aspects have taken longer than expected to fully resolve.” As a result it is now to move its go live date to early 2022 – after the peak trading period in the run up to Christmas. That will give it the ability to test its stability and business readiness before it goes into operation. However, Ted Baker says the date change “will have no material impact on the performance of our ecommerce business”.

Ted Baker chief executive Rachel Osborne says: “Our transformation programme remains on track, and 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 and through our cost savings programme.

“The Ted Baker brand remains strong, evidenced by YouGov’s recognition of Ted Baker as the second most popular luxury brand in the UK.  Our product also continues to strengthen, and we are pleased by the start to the Autumn/Winter 2021 collections which is being well received by our customers. Combined with our robust balance sheet and strong cash management we are well placed for the future. It is still early days in the recovery, but we are confident that Ted is starting to emerge from Covid a stronger and more resilient business.”

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