7 Sept 2021
After learning of his relationship with Secret Sales this week, Ted Baker released a second-quarter trading update on Tuesday, saying that sales are in line with forecasts and that he sees a “significant improvement” in the full-price offering.
The report, which spans the 16 weeks from April 25 to August 14, combines good and bad news and makes clear that the company, which was already in trouble before the pandemic, still has a lot of work to do. According to the company, the continued impact of the coronavirus is causing different rates of recovery in its main markets, but the group’s sales have achieved a 50% increase compared to the second quarter of a year ago.
Declared retail sales increased 30% year-on-year, but were 30% below the figure obtained in 2019.
Store sales increased 142% year-on-year and fell 45% from two years ago. Although many of its stores were open during the commercial period, the influx of the public remained below previous levels and was stronger in regional and out-of-town stores, where they have a smaller physical presence.
However, stores located outside metropolitan centers showed “a good recovery.” The same thing is expected to happen in the second half of the year, as metropolitan centers and airport retail are recovering more slowly than their stores as a whole, given the slow recovery of international tourism and the return to the office that is still partial in the United Kingdom. Kingdom and other markets.
The company has struggled to reestablish its premium positioning and move away from the aggressive markdown campaign it adopted around this time last year. But while that’s good overall, it had a negative impact on the sales performance of its ecommerce operations compared to the previous year. Sales fell 25% year-on-year, but still accounted for 39% of the total. In addition, they increased 17% compared to two years ago.
Revenue from wholesale and licensing sales increased 151% year-on-year and decreased 29% from two years ago. Several of its new licensing partners saw positive momentum during the second quarter, such as Next and Baird.
Likewise, its eyewear licensing partners, (“among the most important in the group”), continued to show a “good performance”, with an increase of 72% year-on-year and 27% after two years.
The business trend “continued to increase during this period, with an exit rate for the past four weeks in retail better than the overall second-quarter results for retail sales.”
The concessions in the United States, as well as the shopping centers in the United States and the United Kingdom, are showing “better results as consumer confidence recovers.”
The trade margin also improved by more than 500 basis points due to a “significantly better full-price offering across all retail channels.”
The company has also said that its brand remains strong, with great popularity among UK consumers, according to a recent YouGov survey, and its fall-winter 2022 collections have been “very well received by Ted customers, with very encouraging advance sales. ” He also added that “the novelties are working well, with a positive response to the new structure of the product pyramid.”
It has also made “good progress” on its new e-commerce platform, but “some technical issues have taken longer than expected to be fully resolved.” Taking into account “the proximity of the next period of maximum commercial activity and the need to test its suitability and stability before implementation, we will move the date of entry into operation until early 2022”.
Although the date change will have “no material impact on the results of our e-commerce business,” it will be a disappointment for the company due to the importance of e-commerce in fashion shopping today. But this is a sensible decision, especially since some retailers have launched new e-commerce platforms in recent years and have encountered technical problems that have depressed sales when they should have increased.
“We have made encouraging progress with commerce in the second quarter. Our transformation program is ongoing and we have made progress on the three key pillars of our plan, renewing and revitalizing the product and the brand, prioritizing digital growth and equity investment. , and through our cost savings program, “said CEO Rachel Osborne.
“Thanks to a good balance sheet and strong cash management, we are well positioned for the future. It is still early for the recovery, but we are confident that Ted is beginning to emerge from the coronavirus crisis as a stronger and more resilient business,” concluded.
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