British brand and retailer Ted Baker announced a 14.3% drop in profit before tax and exceptional items to £63m for the year to 26 January 2019, blaming discounting, consumer uncertainties and high-street challenges.
Acting chief executive Lindsay Page stressed that “difficult trading conditions” across several markets had made for a challenging year.
Group revenue for the group rose by 4.4% to £617.4m for the period, with retail sales including ecommerce up by 4.2% to £461m. Ted Baker flagged that its flexible store model, with a low number of stores and focus on brand identity, allowed it to adapt to structural changes in the retail sector more easily.
Ecommerce grew by 20.4% to £121.4m, and now comprises 26.4% of total retail sales for Ted Baker.
Wholesale revenues rose by 4.8% to £156.5m and licence income grew by 3.1% to £22.1m. Ted Baker bought back its footwear licence from Pentland Brands during the year, but has since signed new licencing agreements for men’s underwear and loungewear with Delta Galil and a watch licence with Timex. Licensed Ted Baker stores opened for the first time in India, Kazakhstan, Kosovo and Ukraine.
Commenting on the results, Page said: “Ted Baker has continued to grow across each of the brand’s distribution channels despite difficult trading conditions across a number of the group’s global markets. This resilient sales performance again reflects the strength of the brand, the talent of our teams, and the quality of our collections.”
It has been a turbulent year for Ted Baker. Founder and CEO Ray Kelvin resigned in March, having previously taken a voluntary leave of absence from his role as CEO of Ted Baker in December, after allegations of misconduct were made against him. Kelvin has denied all allegations of misconduct.
An investigation into Ted Baker’s handling of the complaints is ongoing, as are investigations into the complaints, led by law firm Herbert Smith Freehills.
The business issued a profit warning in February, saying profits had been adversely affected by the weakness of the pound against the dollar and the euro in the last week of its financial year, as well as £2.5m in additional product costs that arose in the second half.
It added that systems and warehousing transitions in the US and Asia resulted in an unanticipated write-down in the value of its inventory of around £5m.