Ted Baker FY losses widen as Covid restrictions bite

Ted Baker reported a widening of its full-year losses on Monday as revenues slumped due to Covid-related restrictions.

In the 53 weeks to 30 January 2021, pre-tax losses widened to £107.7m from £77.6m on revenues of £352m, down 44.2% the previous year. The company posted an underlying pre-tax loss of £59.2m versus a £4.8m profit the year before.

The fashion retailer said Covid-19 restrictions had a "significant" impact on its performance, resulting in stores remaining closed for much of the year and depressed demand in its key markets. While some demand shifted online, this was not enough to compensate for the shortfall in store sales in the year.

It added that the drop in revenues was particularly pronounced in the second quarter, when the full impact of lockdowns began to bite internationally, and affected all channels, especially wholesale.

As far as current trading is concerned - the first 12 weeks to 24 April - Ted Baker highlighted a material impact from ongoing restrictions, with lockdowns in place in the UK, Europe and Canada for parts of the period.

FY22 first-quarter group revenues were down 19.9% as a result. Meanwhile, e-commerce sales were 4.5% higher, down from a 25.9% increase in the first quarter of last year, as the retailer takes a less heavy promotional stance. Store sales were 40.7% lower, which is an improvement on the 73.1% decline seen in the first quarter of the previous year.

Chief executive officer Rachel Osborne said: "We are making good progress against our strategic transformation plan and Ted Baker is increasingly well placed to take advantage of the significant growth opportunities ahead of us. The Ted Baker brand has strengthened further, with the number of active customers growing to 1.2m by the end of the year.

"While the impact of Covid-19 is clear in our results and has amplified some of the legacy issues impacting the business, Ted Baker has responded proactively and is in a much stronger place than it was a year ago."

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: "Covid holds a particularly painful sting for Ted Baker. Lockdowns are every retailer’s nightmare, but especially so for ones that rely more heavily on formal and occasionwear. The business was already in a tough spot before the crisis, and the going has simply got tougher. What’s stark is the evidence the online business wasn’t up to scratch.

"While e-commerce revenue is positive, unlike the physical store-estate, this hasn’t come close to plugging the sales gap. And as restrictions are easing, that digital momentum looks to be dissipating, with online sales growing more slowly in the first quarter of the new year. Ted Baker needs to find a way to sustainably improve its online business, or it won’t bode well for trading patterns in the post-pandemic, digital-centric world."