Online sales offer some shine for Ted Baker’s results

Ted Baker has seen its e-commerce unit offer some hope for an otherwise gloomy prospect. Online sales at the British fashion retailer has improved by 85 percent to 24 million dollars (17.9 million pounds) in the U.S. alone.

In fact, online sales at the American branch of Ted Baker Plc. now account for 52 percent share of the business, up from just 15 percent in the same period in 2019. Noteworthy, Californian units in Malibu and Santa Monica, and in Scottsdale, Arizona—where, according to chief financial officer David Wolffe “the economics of reopening were unattractive”—all closed for good, reducing the label’s commercial network in the U.S. to 35 stores.

Covid-19 has accelerated the prevalence of Ted Baker’s e-commerce

However, the strong online performance was not enough to prevent revenue at the North American division sliding by 46 percent to 46 million dollar in the 28-week period, a worse decline than in Ted Baker’s other key regions like the UK and Europe which was down by 37 percent to 118 million dollars.

The company explained in a statement that at the beginning of the year with a mandate to turn it around, explained that “In comparison to the UK and Europe, (North American) disruption to trading in stores started later but was longer lasting, reflecting the varying local responses to Covid across the region, as well as political and social unrest.”

“The Covid headwinds have been tough for us. They amplified some of our legacy issues and heavily impacted our city center and travel stores performance,” said Ted Baker CEO Rachel Osborne. On a related note, the global pandemic has made apparent that the brand needs to catch up with new consumer trends. In this regard, Pippa Stephens, retail analyst at research consultancy GlobalData, commented that “Ted Baker’s troublesome performance comes as no surprise, since its specialism in formalwear increased its exposure to the impact of Covid-19, with many consumers shifting their spending towards casual or loungewear categories.

She added in a commentary cited by Reuters that “While the retailer has attempted to adapt, it was too slow. Pressure from competitors also led Ted Baker to implement heavy discounting, including a ‘50 percent off everything’ promotion over Black Friday, drastically denting profit margins. This is also likely to have a significant impact on consumers’ perceptions of the brand.” On the upside, the company trusts its new leadership and said in a statement that “Our foundations are (now) fixed and we are confident in the delivery of our plans.”