Ted Baker has come to the end of a “dream run” of results with a respectable set of interim results for the 28 weeks ending 11 August in which the pressures of the challenging market conditions were evident.
During the period the global fashion and lifestyle brand achieved a 3.5% increase in group revenue to £306m but pre-tax profit was down 3.2% at £24.5m. Retail sales including e-commerce were up 1.1% to £220.1m.
Regionally the UK and EU were up 1% at £147.1m, the US was up 1.8% at £61.8m, while the rest of world sales were down 1.8% to £11.2m.
By channel the breakdown showed while e-commerce sales up 24.1% at £53m, wholesale sales up 10.1% at £85.9m, while licensing income was up 11.7% to £10.9m.
Chief executive Ray Kelvin said Ted Baker had “continued to develop and expand as a global lifestyle brand across its markets and distribution channels despite challenging external trading conditions. This continued growth is testament to the strength of the Ted Baker brand, the design and quality of our collections as well as the dedication and talent of our teams.”
However he added that he expected the second half to remain challenging but Ted Baker was well positioned to continue its long-term development. “Our flexible business model ensures that our customer has multiple channels to engage with Ted Baker and our global e-commerce business continues to expand, supported by our digital marketing strategy and unique stores that showcase the brand,” Kelvin said.
Senior market analyst at www.cityindex.co.uk Fiona Cincotta said the results marked the end of a “dream run” for the brand, which had been posting consistently strong results in recent years.
“Ted Baker’s dream run has hit the wall. Revenue growth has slowed considerably compared to last year and retail margins have fallen by a full 1.4 percentage points in the first half,” Cincotta said.
“Some weakness was to be expected after severe winter storms and a particularly hot summer kept shoppers sidelined. But it’s disappointing to see sales per square foot falling at stores abroad, which were supposed to be offering a buffer to tougher trading conditions at home,” she added.
However she said the business was weathering the tough trading conditions better than many of its peers and “its dividend is growing solidly. But more weak results like these will make it harder to dismiss that creeping sensation that this market darling could be losing some of its mojo.”