Ted Baker revenues slumped 55% to £60.9m in the 11 weeks to 30 June but the company’s board said “good progress” had been made with its transformation plan.
Ahead of its AGM today, the premium fashion and lifestyle retailer released a trading update showing that store sales had, understandably, been the cause of the revenue drop.
Stores sales were down 79% to £15.6m during the period but e-commerce soared by +35% to £35.2m. Overall retail sales were down 50%. Wholesale was down 75% to £7.4m and licensing was down 29% to £1.5m.
Despite the woes of COVID-19 the company said trading had been “resilient”. “The Group has taken a more dynamic trading stance since the beginning of the year, reflecting more sophisticated cross-category merchandising, refreshed social media activity and increased marketing spend,” it said.
It said that trading had been ahead of the base scenario set out when it released its preliminary results on 1 June 2020 and that e-commerce had been trading ahead of expectations.
The company revealed that it had been cutting costs to improve margins reducing its supplier base for the SS21 collection from 150 to 100. It had also shortened its stock buying cycle from three years to two years and reduced its buy.
Elsewhere it has put a cap in CAPEX of £10m, down from the previous £15m and has made central headcount savings of £15m annualised. Store payroll savings of £12m annualised have been implemented, through restructuring across its UK and North America stores, with anticipated FY21 cost saving of £5m. It has also saved £3m through rent negotiations with landlords.
The company is also in a strong cash position having carried out a share placing and a sale and leaseback of its London HQ with net cash of £56.7m. It also has an additional £161.7m of available headroom on current bank facilities of £108m, with an additional £25m becoming available from September 2020.
“I am pleased with the early progress we have made in driving operational excellence and cost efficiencies since the launch of Ted’s Formula for Growth in June. Our customers are engaging with the brand and responding to our COVID19 promotional activity, as evidenced by our resilient trading over the past 11 weeks.
“Our performance is encouraging, but I caution that it is still early days, and we have a substantial amount of work to do over the next 12 months against a backdrop of significant uncertainty in the world. However, the Brand has an exciting future, and I am looking forward with cautious optimism that the initiatives currently underway across all areas of the business will bear fruit over the next 12 months,” CEO Rachel Osborne said.