Today’s profit warning from Ted Baker is a sign of tough market conditions rather than shortcomings at the business, its commercial director has told Drapers.
“Difficult conditions at the start of the year have continued through to the current period,” said Phil Clark, adding that Ted Baker has been hit by “very unusual” weather patterns, heavy discounting and a difficult consumer environment in some of its markets.
“Unfortunately, we have been caught up in all those factors combined together.”
“The news about Ray hasn’t affected performance at all. This is very much about the market and actually the brand is in really great health.
“We monitor brand engagement through our digital channels very intensively, and have seen significant growth in brand engagement and brand awareness since Christmas.”
Ted Baker revealed this morning that it expects full-year profits to be in the range of £50m to £60m – down from the previous forecast of just over £70m.
Group sales were up 3.8% – or 1.9% on a constant-currency basis – in the 19 weeks to 27 January. Total retail sales, including ecommerce, fell by 0.3% during the same period. Wholesale revenue increased by 14.2%.
Lindsay Page, who took over from Kelvin, said Ted Baker is “proactively addressing the challenges we face as an industry”.
Clark added: “Our historic strength is to be entrepreneurial, so we try to be nimble and adaptive. We don’t have many stores, so we will be able to weather the storm that’s been happening across the retail industry.”
“This formulises the process a little bit, bringing in new stock on a periodic, regular basis,” Clark said. “We have implemented speed to market, so essentially we’ve designed a small part of the collection closer to the selling season.
“Also, in the next few weeks we will be launching a project called “Ship from store”. This means that if a popular product has sold out in the warehouse when you’re shopping online, customers will be able to fulfil it from store.”
Clark said the business had implemented “heavy investment” over the past few years, including IT, systems, logistics and supply chain management.
He concluded that the future for Ted Baker looks bright: “We have a very positive outlook about the future of the business. The brand is in great shape.
“Almost 50% of our business is in the UK, so there are lots of growth opportunities [internationally]. We recently bought back our footwear licence, so there is lots of opportunity to grow this part of the business. There is also lots more to do in the ecommerce side, and new markets to go into.”