Ted Baker's loss widens, turnover drops by 45.9 percent

Ted Baker plc said in a statement that the group’s performance was significantly impacted by Covid-19, which depressed demand in all territories and resulted in stores remaining closed for a significant proportion of the period. As a result group revenue decreased by 45.9 percent or 46.2 percent in constant currency to 169.5 million pounds for the 28 weeks ended August 8, 2020. The gross margin before non-underlying items decreased to 50.3 percent, while the loss before tax declined to 39 million pounds and the loss before tax worsened to 86.4 million pounds compared to a loss of 23 million pounds in 2019. The company added that adjusted earnings per share, decreased to a loss per share of 28.6p and basic earnings per share deteriorated to a loss per share of 64.1p.

Commenting on the trading, Rachel Osborne, the company’s Chief Executive Officer, commented: “This has been an unprecedented period for Ted Baker and today’s interim results clearly show both the impact of the Covid-19 pandemic and the steps we have taken to reset the business. Even with some of our legacy issues being amplified by Covid-19, our balance sheet is materially stronger than we had envisaged this early in the plan and operational cashflow will be positive for the full-year.”

Ted Baker posts decline in retail and wholesale sales

The company further said that retail sales decreased by 42.2 percent or 42.5 percent in constant currency to 124 million pounds, while online sales grew by 41.8 percent or 41.1 percent in constant currency to 74.2 million pounds to represent 59.8 percent of total retail sales. Company-owned directly operated ecommerce business grew by 56 percent. Store sales decreased by 69.3 percent or 69.4 percent in constant currency to 49.8 million pounds. Ted Baker closed four stores during the half year and retail sales per square foot excluding ecommerce decreased 68.4 percent or 68.6 percent in constant currency to 115 pounds. The retail gross margin decreased to 54.6 percent

The company’s wholesale sales decreased by 55.7 percent or 56.1 percent in constant currency to 39.5 million pounds, while licence income decreased 36.6 percent to 6 million pounds. Income was impacted by the challenging trading environment, with a drop in royalties from formalwear licence partners, accounting for 25 percent of the decline, as the increase in working from home affected sales of men’s suits. There were further headwinds from the termination of relationships with Geneva Watch Group and Debenhams childrenswear, partly offset by new and developing partnerships with Next for childrenswear, Timex for watches and Fulton for umbrellas.

Ted Baker menswear sales were down 53 percent to 54.2 million pounds, while Ted Baker womenswear sales were down 42 percent to 109.3 million pounds.

Ted Baker’s performance across core markets

Ted Baker’s retail sales in the UK and Europe decreased by 37.2 percent or 37.3 percent in constant currency to 88.7 million pounds and ecommerce sales increased by 36.4 percent or 36.3 percent in constant currency to 56.2 million pounds. Sales per square foot excluding ecommerce sales decreased by 68.1 percent or 68.2 percent in constant currency. Sales from UK wholesale business decreased by 54.7 percent to 25.2 million pounds.

The company’s sales from North American retail division decreased by 46.1 percent or 47.1 percent in constant currency to 34.4 million pounds. Sales per square foot excluding ecommerce sales decreased to 118 pounds, a drop of 70.1 percent or 70.6 percent in constant currency. Ted Baker’s ecommerce business delivered a strong performance with sales increasing by 85.4 percent or 81.6 percent in constant currency to 17.9 million pounds. Sales from North American wholesale business decreased by 57.6 percent or 58.4 percent in constant currency to 14.3 million pounds. Sales decreased 90.6 percent or 89.4 percent in constant currency to 0.9 million pounds and sales per square foot excluding ecommerce sales decreased 59 percent or 53.7 percent in constant currency.

For the third quarter, Ted Baker said, group revenue fell year on year by 40 percent and 37 percent for the four weeks to November 28, 2020. The Group has seen an improvement in performance compared to Q2, reflecting more consistent operating hours and fewer lockdowns, although trading is still affected by ongoing, localised Covid-related restrictions and footfall shift towards out-of-town and neighbourhood retail locations. Ecommerce sales for the quarter increased 15 percent, while directly operated ecommerce sales increased 25 percent. The four weeks to 28 November have seen total online retail sales increase by 22 percent, with directly operated ecommerce sales increasing by 30 percent. Reported sales decreased 53 percent reflecting a material decline in footfall and stores being closed for part of the period, while wholesale and licence revenue decreased by 46 percent.

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