Jun 12, 2018
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Ted Baker sales slow but UK and US wholesale and e-tail are strong

Jun 12, 2018

When retail times are tough, it’s not how the weakest perform that is of the most interest but the strongest. If they’re suffering, we know that virtually everybody is. Which is what made Ted Baker’s trading update so interesting on Tuesday morning.

Ted Baker

So is the omnichannel power player still on a strong growth curve? Well, it’s still growing, but group revenue in the 19 weeks to June 9 was up only 4.2%, although it managed a more impressive 7.5% rise on a currency-natural basis.

The period, which covers the snowy winter weather as well as the cold and wet start to the spring season, was definitely hurt by “unseasonal weather across Europe and the East Coast of America” early on. And, as previously reported, it said external trading conditions stayed “challenging across many of our global markets.”

The total retail sale rise was even slower than the group revenue increase, lifting by just 0.7% (or 3.6% currency-neutral). That was despite booming e-tail being included in the figure and average retail share footage rising as much 5.7%. That means comparable physical store retail sales fell.

But e-commerce, “which is an integral and increasingly important component within [the] retail channel, performed very well” with sales increasing by 33.6% (36.2% currency-neutral), the company said.  

It also hailed its “flexible business model, including a relatively low number of own stores, [that] enables us to respond to structural changes in the retail sector.”

Physical retail stores were clearly the main problem in the period, but e-tail wasn’t the only strong area of the business with wholesale rising 14.2% (18.9% currency-neutral). This reflected both a good performance from its UK and North American businesses and the earlier timing of wholesale deliveries. It continues to predict at least high-single-digit currency-neutral growth in the wholesale business for the full year as a result.

Both retail and wholesale gross margins were “in line with expectations,” although we don’t know whether those expectations were for a fall or a rise.

Ted Baker's product and territorial licensees also continued to “perform well, reflecting the global strength and appeal of the brand.” The company said it’s pleased with the performance of its product licences with notable performances from Childrenswear, Eyewear, Lingerie and Suiting.

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