British fashion retailer Ted Baker has announced a 3.4% increase in revenue for the 14-week period leading up to 29 July. However, it is important to note that this growth is flat on a currency-neutral basis compared to the same period last year. In addition, revenue is down over 28% when compared to the second quarter of the pre-pandemic period.

Despite these challenges, Ted Baker is optimistic about its performance, particularly in its physical stores. Sales in stores have seen a 20.4% increase in revenue, driven by an increase in footfall as consumers return to the high street. However, e-commerce sales have been negatively affected by ongoing disruptions from re-platforming.

E-tail revenue has decreased by 13.2%, but on a like-for-like basis, there has been a 4% increase compared to the pre-Covid quarter. This decline is attributed to the challenges following the launch of the new e-commerce platform and the return of customers to physical stores.

Wholesale revenue has experienced a decline of 14.1% compared to the pre-Covid quarter. This is due to last year’s Q2 restocking surge following the easing of lockdown restrictions.

On a positive note, Ted Baker has seen growth in its license revenue, which has increased by 62.3% and risen by 14.9% against the pre-pandemic period. This growth is driven by increased travel and footfall, resulting in a strong performance in formalwear and childrenswear.

The company acknowledges that its inventory levels currently consist more of prior season stock than planned due to slower-than-expected sell-through of sales products. Nevertheless, Ted Baker remains committed to its transformation program, with a focus on digital growth and driving efficiency through transformation.

Ted Baker anticipates that customers will continue to prefer physical stores as footfall and global travel recover. However, it acknowledges that there may be challenges with traffic and conversion rates until the issues with the new e-commerce platform are resolved. The company is working diligently to ensure that the system is fully functional and optimized before the peak trading season, but there is still a risk that certain milestones may not be met.

Additionally, Ted Baker is cautious due to the recent deterioration of the macro-economic environment, falling consumer confidence, and ongoing supply chain volatility as it approaches its event-led peak trading season.

Overall, while Ted Baker’s revenue growth is positive, there are still challenges to be addressed. The company is focused on overcoming these obstacles and remains hopeful for a successful peak trading season.

Useful Links:
Ted Baker Official Website
Retail Gazette