After announcing its collaboration with Secret Sales earlier this week, Ted Baker released a trading update for the second quarter on Tuesday, announcing that sales were in line with expectations and that there was a “significant improvement” in the full pricing mix.
The report, which covers the 16 weeks from April 25th to August 14th, has both good and bad news, noting that the brand, which was struggling before the pandemic, has some left to do has to do. The company said that the ongoing effects of the Covid pandemic are causing varying rates of recovery in key markets, but that group sales are up 50% compared to the second quarter of last year.
Reported retail sales increased 30% year over year but were 30% lower than 2019.
In-store sales increased 142% year over year and decreased 45% on a two-year basis. Although many of the stores were open during the reporting period, customer footfall remained below the level of previous years and continued to be stronger in the outskirts and regions where the company is less present.
Business outside the metropolitan areas continued to show a “healthy recovery”. The company expects to see a similar trend in the second half of the year, as city centers and travel retailers are recovering less quickly than the rest of the store network, given the slow return of international tourists and the still limited return to offices in the UK and other markets.
The company has worked hard to restore its premium positioning and to move away from the aggressive price reduction it operated around this time last year. While this is generally a good thing, it had a negative impact on the sales performance of the e-commerce business compared to last year. Sales in this area were down 25% year over year, but still accounted for 39% of total sales. Compared to 2019, they increased by 17%.
Wholesale and license sales increased 151% year over year and decreased 29% year over year. Several of the newer license partners saw positive momentum in the second quarter, including Next and Baird.
The eyewear license partners continued to show “robust performance”, increasing by 72% year-on-year and 27% year-on-year.
Retail momentum continued to pick up during the reporting period, with retail sales in the past four weeks “outperforming overall performance in the second quarter.”
The North American concessions, as well as the North American and UK malls, showed “improved performance as consumer confidence rebounded”.
The trading margin also improved by more than 500 basis points due to a “significantly better full price mix in all retail channels”.
The company also said that its brand remains well known and loved by UK consumers, according to a recent YouGov survey, and that 22 Autumn / Winter collections have been well received by Ted customers, with the first being the first Sales were encouraging “. The company added that “the innovations are working well, with a positive response to the new product pyramid structure”.
The company has also made “good progress” on its new e-commerce platform, but “some technical issues took longer than expected to fully resolve”. Given the proximity to the upcoming prime trading time and the need to fully test the platform’s viability and stability prior to implementation, we will postpone the launch date to early 2022. ”
While the postponement “won’t have a material impact on the performance of our e-commerce business,” it is a disappointment for the company considering the importance of e-commerce to fashion shopping today. But it’s a sensible decision, especially as some retailers have launched new e-commerce platforms in recent years and found that technical issues were affecting sales when they should have been increasing. “
Cautiously optimistic, CEO Rachel Osborne said, “We made encouraging progress in the second quarter. Our transformation program continues to go according to plan and we have made progress on the three main pillars of our plan, namely updating and relaunching our product and brand, prioritizing digital and capital-intensive growth and our cost-saving program. “
“With our solid balance sheet and strong cash management, we are well positioned for the future. The recovery is still in its infancy, but we are confident that Ted will emerge from Covid as a stronger and more resilient company.”
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