Ted Baker signs new licencing deal in Japan
Fashion retailer Ted Baker said on Wednesday that it has signed a deal with Japan's Sojitz Infinity to sell its goods in Japanese department stores.
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Infinity will be the company's Japanese retail licence partner for the next five years, in a deal that ted Baker estimates will cost around £4m, of which approximately £3m is expected to be in cash.
Once the retail licence begins on 1 October, the company will have 17 retail licence partners across the globe.
The new operating model is expected to have a marginally positive impact on pre-tax profit from the current financial year and greater benefit in the further years of the licence.
Chief executive officer Lindsay Page said: "We are very excited about the next stage of growth for the Ted Baker brand in Japan. Over recent years, we have invested in introducing Ted Baker to Japanese customers and we are confident that our new Japanese retail licence partner will build on this platform and deliver meaningful long-term growth.
"In Sojitz Infinity Inc., we have an extremely capable partner that brings local market expertise to our brand alongside our already well-established design, buying and merchandising skillset. This combination will drive an acceleration in performance of the business. We firmly believe that Japan has the long-term potential to be an important market for the Ted Baker brand."
Ted Baker currently has five stores in Japan. The deal with Infinity will build on the existing store portfolio, expand the concession network and invest in the group's online presence.
At 0815 BST, the shares were up 1.9% at 929p.
House broker Liberum said: "The conversion of TED's Japanese operations into an exclusive retail licence is a further positive step that completes the reorganisation of the group’s Asian operations and its strategy for the region. It brings in a very credible, well established partner that can deliver long-term growth by building on the investment TED has already made to introduce the brand to Japanese customers.
"We view the deal as sensible and believe it highlights both management’s ambition and the long-term opportunity that lies ahead for TED to continue growing through relatively capital light and lower risk channels. Management expects a marginal positive impact on underlying PBT in the current financial year, with greater accretion in outer years. We leave our forecasts unchanged and will review at the H1 results in early October."
Peel Hunt said: "Ted’s Asian penetration remains fairly low; we believe these agreements will serve to accelerate the brand’s expansion into Asia, providing the opportunity for meaningful growth over the medium term."