Ted Baker trades in line in second quarter

High street fashion brand Ted Baker said sales in its second quarter were in line with expectations in Tuesday, with the continued impact of the Covid-19 pandemic leading to different speeds of recovery across key markets.

The London-listed firm said group sales growth was 50% over the same period in the 2021 financial year for the 16 weeks ended 14 August, with trading momentum building through the period, as the last four week exit rate for retail was better than the overall quarterly performance for retail sales.

North American concessions, and North American and UK shopping malls were showing improved performance as consumer confidence recovered.

Ted Baker said its trading margin improved more than 500 basis points year-on-year, due to a “significantly better” full price mix across all retail channels.

Re-establishing the brand’s premium positioning meant moving away from its “aggressive” promotional stance in the second quarter of last year, which did negatively impact the sales performance of its e-commerce operation relative to a year ago.

Ongoing strong stock control led to a clean inventory position at the end of the period, the company said.

Looking at its strategic progress, Ted Baker said its transformation plan was on track, with “solid progress” made against operational key performance indicators set for the 2022 financial year.

Its brand remained strong, with a recent YouGov survey recognising Ted Baker as the second-most popular luxury brand in the UK.

Autumn/winter 2022 collections had been received “positively” by customers, the company reported, with “encouraging” early sales, while product “newness” was working well with a positive response to the new product pyramid structure.

The company signed a new global head office in the so-called ‘Gorgeous Brown Building’, moving from its ‘Ugly Brown Building'.

Its board said the new lease deal secured rental savings of £3.3m per annum, compared to the option to lease block A of the Tribeca development in Kings Cross.

The group said it had made positive progress on work on its new e-commerce platform, although some technical aspects had taken longer than expected to fully resolve.

Given the proximity to the upcoming peak trading period and the need to fully test its business readiness and stability ahead of implementation, the firm said it would move the go-live date to early 2022, adding that it would have “no material impact” on the performance of the business.

“We have made encouraging progress, with trading over the second quarter in line with expectations, albeit the speed of recovery is different across store locations and regions,” said chief executive officer Rachel Osborne.

“Full price sales mix has significantly improved across all our retail channels as we continue to re-establish our premium lifestyle brand positioning.

“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.”

Osborne said the Ted Baker brand remained “strong”, while its product continued to strengthen.

“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-19 a stronger and more resilient business.”

At 0941 BST, shares in Ted Baker were up 0.54% at 167.6p.