Ted Baker, the renowned British fashion retailer, has recently disclosed its half-year financial results, showcasing a sharp decline in revenue and a larger pre-tax loss. However, the company remains hopeful about its future, citing progress made in implementing its growth strategy and generating strong cash flow. Unfortunately, the ongoing disruption caused by the Covid-19 pandemic has forced Ted Baker to cut almost 1,000 jobs.

Although Ted Baker’s brick-and-mortar retail sales suffered immensely, experiencing a staggering 53% decrease as footfall remained low and some stores temporarily closed, the online trading segment has performed remarkably well. E-tail sales witnessed a significant increase of 15% and accounted for 44.6% of the total retail sales.

The first half of the year, which was significantly impacted by store closures due to lockdown measures, saw a drop in group revenue to £169.5 million, with an underlying pre-tax loss reaching £39 million. This loss is considerably higher compared to the £2.7 million loss reported during the same period last year. Retail sales, including e-commerce, plummeted by 42.2% to £124 million, but online sales exhibited an encouraging growth of 41.8% to £74.2 million. Furthermore, Ted Baker’s own e-commerce channels witnessed an impressive increase of 56% in sales.

The wholesale turnover also experienced a significant setback, declining by 55.7% to £39.5 million, as Ted Baker’s wholesale customers faced similar pressures. In the UK and Europe, retail sales dropped by 37.2% to £88.7 million. Despite a 36.4% increase in e-commerce sales within this region, the reopening of stores did not contribute significantly to footfall improvement, especially in city centers and tourist hotspots. Moreover, sales from the UK wholesale business decreased by 54.7% to £25.2 million.

In North America, retail sales declined by 46.1% to £34.4 million. The disruption to in-store trading in this region was delayed but endured longer, reflecting the diverse responses to the pandemic and the political and social unrest prevailing in the area. However, Ted Baker’s e-commerce business in North America showcased exceptional performance, with sales skyrocketing by 85.4%. Conversely, wholesale in North America experienced a significant drop of 57.6%.

While the decrease in revenue primarily drove the company’s loss, Ted Baker managed to offset some of the losses through cost-cutting measures. CEO Rachel Osborne maintains an optimistic outlook, highlighting that the company’s balance sheet is stronger than anticipated, and operational cash flow is expected to be positive for the entire year. Ted Baker has also fortified its leadership team and made headway towards achieving its brand, product, and digital objectives.

Notably, Ted Baker has implemented a new product pyramid, aligning the brand’s identity with market demands. The Mad(e) in Britain collection occupies the top tier of the pyramid, setting the creative tone for the entire collection. The company has recently welcomed Anthony Cuthbertson as its new global creative director, infusing fresh energy and a renewed creative vision into Ted Baker. Customers can soon expect the debut of his first full collection, AW21, and witness an enhanced creative direction during the Spring/Summer 2021 collections.

Additionally, Ted Baker has introduced a sub-brand named MIB or Mad(e) in Britain, inspired by the creativity and culture of Britain. This collection will be released four times a year, in collaboration with well-known talents, elevating the brand as a whole. The company has also revitalized its product ranges, expanding its selection of casual products such as loungewear and incorporating modernized prints within the Womenswear collection. Furthermore, pricing structures have been reviewed and adjusted, with the addition of more entry-priced and upscale pieces.

Amidst the challenges posed by the Covid-19 pandemic, Ted Baker acknowledges the difficulties it has faced but remains hopeful about its growth strategy. With the guidance of a new creative head and a strong focus on aligning its products with market demands, the company aims to successfully navigate the current retail landscape.

Links:
1. Ted Baker’s Reuters Profile
2. Ted Baker’s Reports and Results