The preppy British fashion brand has kicked off the new year getting the industry much to talk about. It joined its high street peers in hiking festive sales, sent its shares up amid flat markets and farewell its chairman Robert Breare,who will be replaced by independent non-executive director David Bernstein.
“We were pleased by the performance in markets where the brand is established and continue to build brand awareness in our newer markets, where we are investing for the longer term. We remain focused on the continued development of the brand globally with further store openings planned in Shanghai in the first half of 2013,” Ted Baker’s chief executive Ray Kelvin said.
After boosting sales by more than a fifth over Christmas and New Year, the clothing chain “delivered a good result” according to Kelvin over the period with retail sales up 20.9 percent in the 8 weeks to 5 January, compared with last year.
On the wake of the news, Singer cut Ted Baker to ‘hold’ from ‘buy’, setting their target price up to 1,125 pence from 1,070 pence. Sanjay Vidyarthi, analyst at Espirito Santo, said the broker had raised its second-half retail sales growth forecast to 22.8 percent – from 18 percent – after the strong Christmas performance, which followed growth of 24.6 percent in the third quarter.
Commenting on trading, the founder and chief executive said: “We were pleased by the performance in markets where the brand is established and continue to build brand awareness in our newer markets, where we are investing for the longer term. We remain focused on the continued development of the brand globally with further store openings planned in Shanghai in the first half of 2013.”
When released their figures, Ted Baker loaded strong sales of men’s suits as the responsible for the boosted business, which increased by over a fifth over Christmas. Its store footprint grew by 13.9 percent to 273,340 square feet. In the same vein, the company added that gross margins did not come under pressure as it reported no “significant” promotional activity before December 25. “Gross margins will be largely in line with last year,” said Lindsay Page, Ted Baker’s finance director.
The past year was one of international expansion for Ted Baker, which opened its first store in Beijing and created a presence in Germany, Japan, South Korea and the Netherlands. In November Ray Kelvin, founder and chief executive, said the company would soon open its first store in Toronto, as well as shops in Shanghai and a new outlet at Heathrow’s Terminal 3 in London in the coming months.
International sales, which have been growing at about 5 percent per year for the past three years, account for about 30 percent of total revenues, according to the company. This backs Page´s announcement of 2013 being a year of consolidation. “We opened 60 stores and concessions last year and only about two were in the UK – this year there will be consolidation,” he said. “We will open in the order of 20 stores and concessions, adding across the globe to where we’ve already got a foothold.”
Ted Baker board also took the chance to announce that Robert Breare, its non-executive chairman, has decided to step down after more than 11 years in the role. David Bernstein, currently senior independent non-executive director, will succeed Breare as non-executive chairman with immediate effect.
Ted Baker shares rose by 0.6 percent and close up to 1,169 pence in the wake of the news.