Ted Baker revenues up 24.5 percent, retail expansion on cards
6 Oct 2015
Group revenue at Ted Baker increased by 24.5 percent to 226.8 million pounds (343.8 million dollars) for the 28 weeks ended August 15, 2015. The composite gross margin fell to 57.6 percent from 58.5 percent last year. The company said, it was partly due to a change in sales mix between wholesale and retail sales and a decrease in the wholesale margin arising from a higher proportion of sales to its licensed stores.
Commenting on the company’s performance, Ray Kelvin CBE, Founder and Chief Executive, said, “Strong performance across all channels and territories is testament to the growing strength of Ted Baker as a leading global lifestyle brand. Through the passion of our team, supported by on-going and careful investment in the brand, we continue to attract customers both in the UK and overseas.”
Growth across retail and whole, declares dividend
Profit before tax and exceptional items increased by 23.4 percent to 17.8 million pounds (26.9 million dollars). Profit before tax increased by 14.6 percent to 17.8 million pounds (26.9 million dollars). Adjusted basic earnings per share, excluding exceptional items, increased by 23.1percent and basic earnings per share increased by 14.2 percent.
The board has declared an interim dividend of 13.2p representing an increase of 16.8 percent, which will be payable on November 20, 2015 to shareholders on the register at the close of business on October 16, 2015.
Retail sales were up 20.1 percent or 19.4 percent in constant currency. Ecommerce business also witnessed a 63.6 percent increase in sales. Additionally, the company said Canadian website launched in November 2014 and the Australian site launched in June 2015 delivered encouraging performances. The retail gross margin remained constant at 64 percent, despite an increase in outlet sales as a proportion of total sales.
Wholesale sales were 39.1 percent above the same period last year and increased 36.2 percent in constant currency reflecting a strong performance from the UK and North American businesses. Licence income was up 16.7 percent with both product and territorial licences performing well. The company witnessed positive performances from product licensees, in particular children’s wear, eyewear, footwear and suiting.
Ted Baker Womenswear performed well with sales up 22.5 percent. Ted Baker Menswear too delivered a very good performance with sales increasing 27.4 percent.
Positive geographical performance
Retail sales in the UK and Europe increased 14.7 percent or 17 percent in constant currency reflecting a strong performance in the company’s established UK market and in continental Europe where it continues to expand presence. During the period, the company opened a store dedicated to showcasing our licensed product range, Ted Baker & Moore, in Spitalfields London and closed one store. It opened further concessions with premium department stores in the UK, France, Germany and the Netherlands. As of August 15, 2015, it operated 37 own stores, three partner stores, 218 concessions and 12 outlets. Ecommerce business performed well with sales increasing by 56.3 percent. Sales from UK wholesale business increased 28 percent.
Retail and wholesale channels in North America performed well. Sales from retail division increased by 37.4 percent or 27.3 percent in constant currency. During the period, expansion continued in Canada, with a new store in Vancouver, and further concessions through a leading department store in the US. The company operated 21 own stores, one partner store, 51 concessions and six outlets at the end of period under review. Ecommerce sales increased 140.9 percent or 119.8 percent in constant currency. Sales from our North American wholesale business increased by 94.7 percent or 79.3 percent in constant currency.
Retail sales in Asia increased 31 percent or 24.2 percent in constant currency. During the period, Ted Baker opened first street level store in Hong Kong, first outlet in South Korea and a concession in China. As at August 15, 2015, it operated eight own stores in Asia, 18 partner stores, eight concessions and three outlets. In the Middle East, its licence partners opened a new store in Azerbaijan, Dubai, Qatar, two stores in Saudi Arabia and closed one store in Dubai. In Asia, it opened new partner stores in Taiwan and Singapore. As of August 15, 2015, the company operated a total of 23 partner stores and seven stores in Australasia.
Rapid retail expansion on cards
The company said that sales in August were adversely impacted by a number of external factors, however, trading in September has been broadly in line with expectations. In the UK and Europe, it has opened a store in Amsterdam and further concessions in Ireland and Spain. It plans to open first outlet in Barcelona and further concessions in France, Germany, the Netherlands and Spain later this year. In North America, expansion continues with two new outlets opening in California and a store in Toronto. The company also has plans to open stores in Hawaii, Malibu and two stores in Los Angeles, two new outlets in Florida and new concessions in Hawaii.
On the back of the strong performance in wholesale business in the first half of the year benefited from a change in buying patterns in North America, it anticipates full year growth of around 25 percent for wholesale business. With product and territorial licences continue to perform well, new store openings are planned in Dubai, Saudi Arabia, Singapore and Taiwan and first concessions in Mexico with a new licence partner along with two new outlets in Australia.