Ted Baker sees e-tail surge, US, Europe and Asia stores also drive growth
Ted Baker proved once again on Tuesday why it’s one of the most buoyant names in an otherwise-under-pressure UK fashion retail sector. The mid-market women’s and menswear chain detailed a double-digit sales rise, further global expansion, yet another e-commerce spurt and a healthy wholesale business.
That’s some achievement given the backdrop of increasing consumer caution, a focus on experiences over ‘stuff’ and UK uncertainty about Brexit, the election and inflation. The company is not immune to the effects of these negative pressures and to the slowdown that is hitting the rest of the industry. But it’s most definitely outperforming many of its peers, which can only bode well for the time - if it comes - when sector conditions improve.
So, what did we learn Tuesday morning? In the 19 weeks to June 10, its group revenue rose 14.2% year-on-year with total retail sales up 14.3% and up 8.4% on a constant currency basis. That was “despite external factors continuing to impact trading conditions across some of our global markets.”
Its e-commerce business continued to perform well with sales increasing an undeniably impressive 35.9% (or 32.3% in constant currency) “reflecting continued growth across our e-commerce sites as well as the strength of our retail proposition.” Average retail square footage rose by 4.9% to 398,000 sq ft, which means comparable sales are clearly rising ahead of the chain’s overall space expansion.
As well as performing well at home, global growth is key and this expansion of the brand continued with successful openings in Los Angeles, Paris, and Shanghai, its first Dutch store in Roermond and further concession openings in premium department stores in France, Germany, Japan, South Korea, and the Netherlands. It opened new concessions in the UK too and also relocated its Miami Aventura and Tokyo stores.
Wholesale, which is a lower-margin channel from which many higher-end brands have chosen to retreat, is performing well for Ted Baker, as it is for a number of its most buoyant UK peers (such as the Superdry label). Sales for the period increased 13.8% (or 8.9% in constant currency) reflecting good performances from both its UK and North American businesses.
It continues to anticipate achieving high single-digit growth (in constant currency) in the wholesale business for the full year.
The company said that both its retail and wholesale gross margins were in line with its expectations and that its product and territorial licensees continue to perform well, reflecting the global strength and appeal of the brand with licensed store openings in Dubai, Kuwait and Mexico.
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