Ted Baker hails ‘resilient’ trading despite revenue dive

Ted Baker has said it is encouraged by its “resilient” trading over the past 11 weeks despite reporting a 55 percent drop in revenues.

Group revenue more than halved to 60.9 million pounds year-on-year for the 11 weeks to 18 July 2020. Retail sales were halved during that period to 51 million pounds - store sales plummeted 79 percent to 15.8 million pounds, while e-commerce grew 35 percent to 35.2 million pounds.

But the company remained optimistic, hailing the results as “resilient” as it moved forward with ‘Ted's Formula for Growth’ - its three-year transformation plan. The performance was better than the base case scenario it set out last month and it said its net cash as of 11 July was 56.7 million pounds, ahead of management expectations “due to strong cash management”.

Shares were up 10 percent following the update.

Online sales shine

The company was particularly pleased with its online performance, which was 19 percent ahead of the base case revenue scenario. As at 18 July, 95 percent of the label’s global store estate was open and 75 percent of stores have been operational for the last four weeks. For those four weeks, however, like-for-like store sales were down 50 percent versus last year, indicating caution from shoppers returning to the high street.

The company did not comment on media reports from Monday that it would be axeing 500 jobs across retail and HQ in a move to cut costs.

“I am pleased with the early progress we have made in driving operational excellence and cost efficiencies since the launch of Ted's Formula for Growth in June,” CEO Rachel Osborne said in a statement. “Our customers are engaging with the brand and responding to our Covid-19 promotional activity, as evidenced by our resilient trading over the past 11 weeks.

“Our performance is encouraging, but I caution that it is still early days, and we have a substantial amount of work to do over the next 12 months against a backdrop of significant uncertainty in the world. However, the brand has an exciting future, and I am looking forward with cautious optimism that the initiatives currently underway across all areas of the business will bear fruit over the next 12 months."

Photo credit: Ted Baker media resources