Ted Baker narrows losses in first half

(Sharecast News) - Fashion brand Ted Baker reported a narrowing of its interim losses on Thursday as revenues jumped following the easing of Covid restrictions.
In the 28 weeks to 14 August, reported pre-tax losses narrowed to £25.3m from £86.4m in the same period a year ago, with revenue up 17.6% at £199.3m. Ted Baker said revenue was driven by a return to retail growth and the partial relaxation of Covid restrictions globally.

Brand sales rose 23% to £433m and wholesale sales were up 40.6% to £55.5m. E-commerce sales were down 14.2% to £63.6m, however, as shoppers moved away from last year's heavy promotional stance "to re-establish premium positioning".

Chief executive officer Rachel Osborne said: "I'm pleased with the continued progress we're making, as we return to revenue growth, and make big strides back towards profitability. The brand remains healthy, delivering a stronger full price mix alongside encouraging early reactions to the new collection.

"The pandemic continues to impact the global retail environment, yet despite this we are delivering against our Transformation Plan. I remain confident that our turnaround of this great global lifestyle brand is on course and that Ted will emerge as a stronger business."

As far as current trading is concerned, the group said revenue for the 12 weeks to 6 November grew 18%, driven by a recovery in the retail store channel, wholesale and licencing.

"Trading has been impacted by ongoing Covid restrictions and subdued footfall into physical retail," it said. "However, the group has seen further sequential improvement in trends during the period, with further progress in trading margin as the group continues to re-establish its premium position and full price sales mix increased further."

Laura Hoy, equity analyst at Hargreaves Lansdown, said: "Ted Baker's half year results showed the fashion retailer is clawing its way back towards profitability as it works to restore its image as a premium brand. With weddings back on the social calendar and offices reopening, people are willing to spend more on their clothes and as a result Ted saw losses narrow as margins improved.

"The headline figures dress up a concerning decline in e-commerce sales though. Heavy promotional activity last year meant online sales were booming, so the group was up against tough comparisons. And we commend the group's commitment to backing away from discounting, which eroded the brand image. Still, a double-digit decline in online sales is troubling."