Ted Baker, the fashion retailer, has reported a significant drop in revenues for the 13-week period from November to the end of January. The company’s sales fell by 47% year-on-year, mainly due to the negative impact of the pandemic and the closure of its UK stores and parts of its international portfolio. Furthermore, a decline in demand for partywear and outerwear during the Christmas season also contributed to the sales decline. However, there was a silver lining as Ted Baker’s casual offerings, including tops, trousers, accessories, and footwear, performed well with above-average sell-through rates.

Brexit has also presented challenges for the retailer, with rising costs following the implementation of the ‘tariff and quota-free’ Brexit deal. Ted Baker expects additional expenses of up to £5 million ($6.9 million) due to extra duty and shipping costs.

Although e-commerce sales helped offset some of the decline, Ted Baker’s direct-to-consumer online sales only rose by 2%, affected by the low demand for partywear and outerwear. Despite this, group e-commerce sales fell by just 1%, accounting for 63% of the company’s total retail sales, compared to 33% the previous year.

Despite the difficult trading conditions, Ted Baker remains financially stable, with net available liquidity of £199.7 million ($275.5 million) and has not utilized any bank facilities during this period. The company is confident in meeting its anticipated peak cash requirements later in the year.

In terms of international sales, Ted Baker’s joint venture in China, Hong Kong, and Macau saw strong growth during the period, with a 14% increase and a remarkable 33% increase in mainland China.

Looking forward, Ted Baker is focused on its transformation plan, which is progressing on schedule despite the ongoing disruptions caused by the pandemic. The company plans to launch a new e-commerce platform in the current quarter, which is expected to significantly enhance functionality and flexibility.

Additionally, Ted Baker has announced a partnership with Bedeck for licensing bedding and towels, showcasing its commitment to its digital and asset-light growth strategy and expanding its global reach with these new product categories. This agreement will take effect in January 2022.

While Ted Baker continues to face challenges due to the pandemic and Brexit, the company remains resilient and is taking proactive measures to navigate the current retail landscape. With its focus on the transformation plan, expansion in key markets, and investment in e-commerce capabilities, Ted Baker is positioning itself for a strong recovery in the future.

Useful links:
1. Ted Baker Official Website
2. Retail Gazette