Ted Baker, a well-known British fashion retailer, has reported a drastic 55% decline in revenue due to the impact of the COVID-19 pandemic. Despite this unprecedented challenge, the company remains optimistic and describes its performance as “resilient”. While the trading update did not delve into the rumored job cuts that Ted Baker is planning, it did emphasize the company’s strong online performance during the 11-week period from May 3 to July 18.

During this period, Ted Baker experienced a significant increase in online sales, which it attributes to its proactive approach in terms of trading. The company implemented strategies such as improved cross-category merchandising, refreshed social media activity, and increased marketing expenditure. These initiatives proved successful, leading to satisfactory online sales growth. Ted Baker also expressed satisfaction with the progress made on its three-year transformation plan, known as Ted’s Formula for Growth, and stated that it had more cash available (£56.7 million) than initially anticipated, thanks to effective cash management.

However, the positive news was overshadowed by the sharp decline in overall revenue, which plummeted to £60.9 million. Retail revenue experienced a 50% decrease, reaching £51 million, with brick-and-mortar store sales suffering the most with a staggering 79% decline to £15.8 million. On the other hand, e-commerce sales demonstrated a notable increase of 35% to £35.2 million. Wholesale revenue also declined significantly by 75% to £7.4 million, while licensing income dropped by 29% to £2.5 million.

These figures paint a concerning picture for Ted Baker, a company that has been grappling with challenges for some time and recently initiated a turnaround plan. Nonetheless, Ted Baker remains optimistic about achieving its transformation objectives. The company cites operational efficiency improvements, reduced expenses, and increased profitability of its retail stores as positive indicators. In terms of sourcing its SS21 collection, Ted Baker plans to reduce the number of suppliers, providing them with more concentrated negotiating power and improving buying efficiency.

Despite the considerable decline in revenue, Ted Baker maintains a positive outlook on its current trading situation. The company’s overall performance has surpassed its worst-case scenario, as outlined in an update on June 1. Online trading continues to outperform expectations, with online sales accounting for 69% of total retail sales during the reported period, compared to just 25% in the same period last year.

While the extraordinary circumstances of this year have undoubtedly contributed to the surge in online sales, it also signifies a remarkable shift in consumer behavior. It is worth noting that 95% of Ted Baker’s stores were open as of last weekend, with 75% operating for the past month. However, despite these efforts, like-for-like store sales were still down 50% compared to the previous year during this period, highlighting the ongoing challenges faced by physical retail.

CEO Rachel Osborne acknowledges the progress made since the launch of Ted’s Formula for Growth in June. She notes that customers are actively engaging with the brand and responding positively to its COVID-19 related promotional activities. However, Osborne warns that there is still much work to be done in the next 12 months, considering the prevailing uncertain circumstances worldwide. Nevertheless, she remains cautiously optimistic about the future of the brand and believes that the ongoing initiatives across all areas of the business will yield positive results in the coming year.

Sources:
– [Ted Baker Reports 55% Decline in Revenue](https://www.example.com/news/ted-baker-revenue-decline) (link opens in new tab)
– [Ted Baker Trading Update](https://www.example.com/news/ted-baker-trading-update) (link opens in new tab)