Ted Baker revenues rise ahead of ABG takeover, but times are still tough
Ted Baker has published a trading update for the 14 weeks up to 29 July ahead of its expected takeover by Authentic Brands Group.
The company said revenue growth was 3.4% for the period – or flat on a currency-neutral basis – compared with Q2 a year ago. But it was down over 28% compared with the second quarter in the pre-pandemic period.
However, compared to some recent updates the latest performance was encouraging and the company said it was led by stronger sales in physical stores across both its own shops and those of its partners. However, this was partially offset by continued disruption from re-platforming that adversely affected its e-commerce sales.
Stores revenue was up 20.4% and down 23% like-for-like compared to the pre-pandemic Q2. It was led by increased footfall to Ted Baker locations as consumers returned to the high street.
E-tail revenue was down 13.2% but up approximately 4% like-for-like against the pre-Covid quarter. As mentioned, it was “impacted by challenges following the launch of the new e-commerce platform, alongside consumers returning to shop in stores”.
Wholesale revenue was down 14.1% and down 38.6% against the pre-Covid quarter, “reflecting a strong prior comparative as retail outlets restocked in [last year’s Q2] following the ending of lockdown restrictions”.
Licence revenue 62.3% and rose 14.9% against the pre-pandemic period as the increase in travel and footfall drove a strong performance across formalwear and childrenswear.
“Inventory levels continue to reflect good working capital discipline but are currently more weighted towards prior season stock than planned, which reflects slower than expected sell through of sales product,” Ted Baker said.
It added that it’s “making continued progress through the third year of our transformation programme with a focus on re-energising the product, prioritising digital and capital light growth and driving efficiency through transformation”.
The company has also seen further improvement in the full-price sales mix “led by good momentum from newer ranges, whilst sell-through of sales product was slower than expected”.
It expects to see a continuation of customers choosing to shop in stores as high street footfall and global travel both continue to recover.
But until the current issues with the new e-commerce platform are resolved, it also expects to see “a drag on traffic and conversion rates. Work continues at pace to ensure that the system is fully functional and optimised ahead of peak trading, although risk remains that certain milestones may not be met in this period”.
It also said it remains “mindful of the significant recent deterioration of the macro-economic environment, falling consumer confidence and continued volatility in the supply chain as we move towards Ted Baker's event-led peak trading season”.
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