Ted Baker chief executive Ray Kelvin tells Drapers about Sales promotions, shoppers trading up and international expansion.
Things have been a bit more difficult for Ted Baker this Christmas but you’re still pleased with the result?
It’s a very credible result in a challenging market so I’m pleased.
The margin and profit expectations have been hit by all the discounting before Christmas though?
There was some promotional activity before Christmas, but we didn’t go on Sale until after Christmas. The promotions were more on the back of what everyone else was doing rather than [us] having to do [it]. You feel like you have to offer some promotions if everyone else is. You can almost look a bit arrogant if you don’t. It was an opportunity to give something back to the shoppers.
How has trading been since Christmas?
Actually quite good. We’ve had an OK start to the year. We’re getting some spring stock in, but at the moment it’s all about the Sale. We should be out of Sale by the end of the month. We’ve got a clean stock position.
Is the wholesale side of the business also being hit by the economic downturn?
On the retail side we’ve said that performance will be in line with the lower end of the range of market expectations and the wholesale side is no worse. For a while we’ve been pulling out of some stockists that are not right for the brand, and that’s an ongoing strategy.
How can your stockists beat the downturn?
On a general note the truth for all retailers is that they need to focus on quality, service and product design.
Are you expecting to make promotions a more regular occurrence this year?
When times are tough, shoppers expect lower prices and retailers jump on the bandwagon with Sales but we won’t be doing any. We don’t want to devalue the brand.
How will the confidence of your customer, which is towards the more premium end of the high street, be impacted by the economic downturn?
A lot of people who buy top end luxury brands will come to us because we offer good value and it’s a quality product. Some shoppers will want to make investment purchases and trade up. We’re in a niche market and there aren’t that many people in it.
Are you still planning to carry on opening stores this year?
Yes, we have no fixed debt so we’re in a good place. We’ll look at opportunities. I hope there will be some good deals around with landlords.
How important is international expansion now and what impact are currency issues having?
It’s still full steam ahead and we’re looking at opportunities. The currency situation may be an opportunity to get into new markets with a lower entry cost.
What’s the outlook for 2009?
As always quality will win through in the end. You can’t fool the customer. Having the right product with the right design and making sure you target your niche will be the key things to do this year.
Read the full Ted Baker Christmas trading statement.