Ted Baker fights off threat of the online upstarts
TED Baker is fighting the threat of low- cost online upstarts by targeting shoppers who want affordable luxury.
The fashion group said prioritising quality and not overselling its garments had helped it avoid the pitfalls of its competitors, which have struggled against competition from the likes of Boohoo and Asos.
Customers turned to the retailer for wedding dresses, golf wear and specialist summer and tall ranges as its laissez-faire approach to marketing proved popular, helping sales to rocket across its stores and online platform.
Ted Baker’s retail sales jumped 14.2pc in the 19 week period to June 10 while online sales soared 35.9pc.
Wholesale sales for the period increased 13.8pc. The firm however did not reveal like- for- like sales – sales in stores open more than a year – which are widely considered to be a better barometer of performance.
Ray Kelvin, founder and chief executive, said the brand had performed strongly in the period because it didn’t try too hard. He said: ‘ We don’t make ourselves so readily available, we don’t oversell and we’re not hungry for profit.’
He added that the firm had been cautious in its approach to expansion, opting against aggressively planting shops in favour of opening branches in niche and relevant markets. The move saw Ted Baker open stores in Los Angeles, Paris and Shanghai in the period and further concession outlets in department stores in France, Germany, Japan, South Korea, the Netherlands and the UK.
George Salmon, equity analyst at Hargreaves Lansdown, said Ted Baker’s controlled store expansion had ‘translated into some lucrative results for shareholders’. Fashion retailers are dealing with a fall in spending as shoppers become more cautious in the face of rising inflation. Data from the British Retail Consortium and KPMG showed growth in online sales of nonfood products fell to the lowest level since records began in May adding 4.3pc last month compared to a 13.7pc spike in 2016.
Separate figures from Barclaycard showed consumer spending growth had fallen to a 10-month low of 2.8pc in May. But Kelvin said Ted Baker is not worried about its competitors and is reaping the benefits of the middle-market retail ‘sweet spot’.
Meanwhile 22pc of shareholders voted against the re-election of chairman David Bernstein at the annual meeting yesterday. It is believed the protest vote was due to the chairman’s position on the finance and audit committee.