Ted Baker reports first half loss, sales drop

For the 28 weeks ended August 10, 2019, Ted Baker plc, said against the backdrop of very difficult trading conditions, group revenue decreased by 0.7 percent or 2.5 percent in constant currency to 303.8 million pounds (373 million dollars). Gross margin decreased to 54.3 percent, while loss before tax before exceptional Items and IFRS 16 was 2.7 million pounds (3.3 million dollars) compared to a profit of 25 million pounds in 2018 and loss before tax reached 23 million pounds (28.2 million dollars) against a profit of 24.5 million pounds in 2018. Adjusted loss per share was 4.5p compared to earning per share of 43.8p and basic loss per share was 46.1p against earnings per share of 42.8p in 2018.

Commenting on the company’s results, Lindsay Page, Ted Baker’s Chief Executive, said in a statement: “We are continuing to pro-actively manage the significant challenges impacting our sector including weak consumer spending, macro-economic uncertainty, and the accelerating channel shift towards e-commerce. However, we are not immune to these pressures which have impacted our financial performance during the first half of the year.”

Review of Ted Baker’s first half results

Retail sales decreased by 2.5 percent or 4.1 percent in constant currency to 214.5 million pounds (263.3 million dollars). There was a decrease both in stores, which decreased by 2.9percent or 4.6 percent in constant currency and online, where sales decreased 1.3 percent or 2.4 percent in constant currency to 52.3 million pounds (64.2 million dollars). Wholesale sales increased by 4 percent or 1.8 percent in constant currency to 89.3 million pounds (109.6 million dollars), while on a comparable basis, wholesale sales decreased by 9.8 percent or 11.7 percent in constant currency.

Licence income decreased 13.1 percent to 9.4 million pounds (11.5 million dollars adversely impacted by the acquisition of No Ordinary Shoes Limited and No Ordinary Shoes USA LLC on January 1, 2019. Excluding this impact, underlying licence income increased by 2.8 percent.

Ted Baker menswear sales were up 0.5 percent to 115.3 million pounds (141.5 million dollars) and represented 38 percent. Sales benefited footwear sales in the period following the acquisition of the footwear business in January 2019, excluding which, menswear sales decreased by 3.8 percent. Ted Baker womenswear sales were down 1.5 percent to 188.5 million pounds (231.4 million dollars) and represented 62 percent of total sales. Excluding footwear womenswear sales decreased by 5.9 percent.

Ted Baker’s performance across core markets

Ted Baker’s retail sales in the period in the UK and Europe decreased by 3.9 percent in current and constant currency to 141.3 million pounds (173.4 million dollars), which the company said was due to the very difficult trading conditions throughout the period amplified by heightened levels of consumer uncertainty. E-commerce sales decreased by 3.3 percent or 3.1 percent in constant currency to 41.2 million pounds (50.5 million dollars). During the period, the company opened one store in Hamburg and one outlet in Metzingen, Germany, a further concession in Germany and closed four concessions across the UK, Ireland and Germany.

Sales from our UK wholesale business increased by 1.5 percent to 55.7 million pounds (68.3 million dollars), reflecting footwear sales following the acquisition of the footwear business in January 2019. Excluding this, sales of UK wholesale business decreased by 12.7 percent.

The company added that sales from North American retail division increased by 3.1 percent and decreased 2.3 percent in constant currency to 63.7 million pounds (78.1 million dollars) driven by the very difficult trading conditions and unseasonable weather experienced across North America in the early part of the period. Sales per square foot excluding e-commerce sales decreased 10.2 percent in constant currency. In the period, Ted Baker opened a new store in Detroit and further licence partner stores in Mexico. E-commerce sales increased by 11.5 percent or 4.2 percent in constant currency to 9.7 million pounds. Sales from North American wholesale business increased by 8.4 percent or 2.5 percent in constant currency to 33.6 million pounds, reflecting the acquisition of the footwear business, excluding which, sales decreased by 4.6 percent or 10 percent in constant currency.

In Asia, sales decreased 15.2 percent or 17.2 percent in constant currency to 9.5 million pounds (11.6 million dollars) and sales per square foot excluding e-commerce sales decreased 4.6 percent in constant currency. In Japan, the company closed one concession in the current period but also closed one store and several concessions in the prior year that have annualised in the period. E-commerce concession businesses in China and Japan delivered sales of 1.4 million pounds. Its licensed stores across the Middle East, Asia and Africa continued to perform well and the company’s existing licence partners opened new stores in Thailand, Singapore, India and UAE and also closed stores in Indonesia, South Korea, Saudi Arabia and UAE.

As at 10 August 2019, Ted Baker operated a total of 74 partner stores and its joint venture with Australian licence partner, Flair Industries Pty Ltd, operated nine stores in Australasia.

The company’s board has declared an interim dividend of 7.8p, which will be payable on November 22, 2019 to shareholders on the register at the close of business on October 11, 2019.

Picture:Ted Baker media centre