Ted Baker brand increased 23 percent to 433 million pounds in the first half period, while group revenue was up 17.6 percent or up 21.4 percent in constant currency to 199.3 million pounds, driven by a return to retail growth and the partial relaxation of Covid restrictions globally.
The company said, gross margin improved by 250 basis points to 55.7 percent, while reported pre-tax losses reduced by 61.1 million pounds or 70.7 percent at 25.3 million pounds.
Commenting on the results, Rachel Osborne, the company’s chief executive officer, said in a release: “I’m pleased with the continued progress we’re making, as we return to revenue growth, and make big strides back towards profitability. I remain confident that our turnaround of this great global lifestyle brand is on course and that Ted will emerge as a stronger business.”
Review of Ted Baker’s financial results
The company’s retail sales including ecommerce were up 10.4 percent or up 14.1 percent in constant currency to 136.9 million pounds. This increase, Ted Baker said, was driven by high levels of promotion and markdown to clear stock that could not be sold through stores closed to comply with lockdown restrictions. While ecommerce sales decreased by 14.2 percent year on year, this represents an increase of 21.6 percent over two years, broadly in line with historical growth rates.
The company’s wholesale business in the UK and Europe during the period was affected by disruption to supply chains as a result of Covid-19 and Brexit, which necessitated some additional use of air freight to supply customers. Sales increased by 40.6 percent or 45.2 percent in constant currency to 55.5 million pounds and gross margin improved to 31.1 percent.
The company’s licence income increased by 15.1 percent to 6.9 million pounds.
Performance of Ted Baker’s product lines
Ted Baker womenswear sales increased by 13.9 percent to 124.5 million pounds and represented 64.7 percent of total sales. Ted Baker menswear sales increased by 25.4 percent to 67.9 million pounds and represented 35.3 percent of total sales.
Retail sales in the UK and Europe increased by 0.4 percent or 1 percent in constant currency to 89.1 million pounds, with ecommerce sales representing 56.2 percent of the total. Despite the impact of Brexit and the continuing pandemic, demand from trustees and licence partners recovered significantly from last year’s level, increasing our wholesale sales by 18.1 percent or 46.2 percent in constant currency.
The company’s North American business continued to face challenges, with the Delta Covid variant and travel restrictions affecting footfall, particularly in key tourist markets such as New York, Los Angeles, San Francisco and Las Vegas, and stores in Canada closed under lockdown for a significant proportion of the year.
Retail sales in this market increased by 33.8 percent or 46.1 percent in constant currency to 46 million pounds, with store sales increasing by 97.3 percent or 114.3 percent in constant currency. ECommerce sales fell by 24.5 percent to 13.5 million pounds, up 16.9 in constant currency as demand returned to physical channels. This still represents a net increase of 51 percent over pre-pandemic levels. Ecommerce sales represented 29.4 percent of total retail sales.
The wholesale business in North America increased by 30.6 percent to 18.7 million pounds.
Ted Baker’s Q3 revenues increase 18 percent
For the third quarter group revenue was up 18 percent or 20 percent in constant currency, driven by recovery in retail store channel, wholesale and licencing.
Retail stores were up 34 percent but down 38 percent compared to Q3 FY20. Ecommerce was down 10 percent and (up 4 percent against Q3 FY20) reflecting the highly promotional comparatives from prior year and stronger full price stance by the group.
Wholesale and licence was up 24 percent and down 33 percent vs. Q3 FY20 reflecting ongoing recovery of store-based trustees and good progress from a number of product licences, including Next (childrenswear and lingerie), Baird (formal suiting) and both eyewear partners.