Ted Baker, the British fashion retailer, recently released its trading update for the second quarter of this year, revealing a mix of positive and negative news. While there has been a significant improvement in the full-price mix, Ted Baker still faces challenges from the ongoing impact of the pandemic.

In the 16-week period from April 25 to August 14, Ted Baker reported a 50% increase in group sales compared to the same period last year. Retail sales saw a 30% year-on-year increase but were still 30% below the figures from 2019. Store sales were up 142% compared to last year but down 45% on a two-year basis. Footfall in stores remained below pre-pandemic levels, with better performance observed in out-of-town and regional locations where Ted Baker has a smaller physical presence. However, the company noted a healthy recovery in its non-metro center stores.

Ted Baker has been focused on re-establishing its premium positioning and moving away from the aggressive markdown strategies it adopted last year. This shift has been beneficial overall, but it did negatively impact the sales performance of its e-commerce operations, which saw a 25% year-on-year decline. Despite this, e-commerce still accounted for 39% of Ted Baker’s total sales.

Wholesale and license revenue fared better, with a 151% year-on-year increase. Ted Baker’s newer license partners, including Next and Baird, experienced positive momentum during the second quarter. The company’s eyewear license partners also showed strong performance, with a 72% year-on-year increase.

The trading margin improved over 500 basis points, thanks to a better full-price mix across all retail channels. Ted Baker’s brand remains strong, with high awareness and popularity among UK consumers according to a recent YouGov survey. The AW22 collections received positive feedback from customers, with encouraging early sales.

However, Ted Baker has faced some challenges with its new e-commerce platform, as certain technical aspects have taken longer to resolve than expected. As a result, the go-live date has been pushed to early 2022 to ensure business readiness and stability. This decision, although disappointing, is a prudent move to avoid potential negative impacts on sales during the crucial peak trading period.

CEO Rachel Osborne expressed cautious optimism, stating that the company has made encouraging progress during the second quarter. Ted Baker’s transformation program remains on track, focusing on refreshing and re-energizing the product and brand, prioritizing digital and capital light growth, and implementing cost-saving measures. With a robust balance sheet and strong cash management, Ted Baker is well-positioned for the future. While the recovery is still in its early stages, the company is confident in its ability to emerge from the challenges posed by the pandemic as a stronger and more resilient business.

Useful links:
1. Ted Baker Official Website
2. YouGov Survey