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Ted Baker swings to half-year loss

Ted Baker has swung to a loss before tax of £23m for the 28 weeks to 10 August 2019, from a profit of £24.5m during the same period in 2018, in what it described as a “challenging half”.

The business said the period was “characterised by unprecedented levels of promotional activity” and ”heightened levels of consumer uncertainty”.  

Group revenue fell 0.7% to £303.8m and the business reported a loss before tax, exceptional items and new property leasing standard IFRS 16 of £2.7m, down from a profit before tax and exceptional items of £25m in the same period last year. 

Retail sales, including ecommerce, dropped 2.5% to £214.5m. UK and European sales were down 3.9% to £141.3m. 

Wholesale sales, however, rose 4% to £89.3m, after Ted Baker bought back its footwear licence from Pentland Group after 17 years at the start of this year.

The brand continued to expand with new store openings in Detriot and Hamburg, as well as an outlet in Metzingen, Germany. This is the first time Ted Baker has entered the German market. 

The retailer warned that if current trends continue, it will achieve a second-half result below that of last year. 

CEO Lindsay Page said: ”We are continuing to proactively manage the significant challenges impacting our sector including weak consumer spending, macro-economic uncertainty, and the accelerating channel shift towards ecommerce. However, we are not immune to these pressures, which have impacted our financial performance during the first half of the year. 

”Despite this, we have delivered a number of important strategic developments including reorganising our Asia operations to drive long term growth, integrating the acquired footwear business and signing an important new product licence partnership for childrenswear. Our autumn/winter collections have been well received and we are excited about our new product initiatives including monthly product drops and speed to market developments. 

”We remain actively focused on cost control and driving further efficiencies. Despite the structural challenges and cyclical pressures on the industry, we remain confident in Ted Baker’s ability to navigate the market and further develop as a global lifestyle brand.

”This confidence remains underpinned by the group’s flexible, omnichannel model, the continuing strength of the brand, and the skill, passion and commitment of our talented teams worldwide.”

 

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Readers' comments (2)

  • Sad
    Not great without RK
    The Exec Chair should resign

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  • darren hoggett

    Kelvin must be extremely concerned by these figures. He is no longer Chief Executive after being forced out, yet remains the largest shareholder with the wheels falling off.

    Are the days of Ted Baker being a profitable entity over?

    Part of the brands success has arguably been driven by marketing, keeping things simple and not trying too hard, meaning they were a safe bet to outperform the market and their rivals. This however came with increasing prices points, where there are other brands out there that some would say do it better and cheaper.

    The excuses peddled out by his successor fall into the modern line of corporate rhetoric and cliches, whilst blaming nobody at the company for their failings. I find this nauseating and disingenuous. When results are bad for a brand or retailer, there must personal and/or collective responsibility as a matter of course. Whilst economic conditions are a factor, they are one of many.

    Whether Kelvin's departure was justified or not, the evidence looks like they are worse without him. It could be time for the brand to totally question its raison d'être as their crystal ball continues to mist.

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