Ted Baker plan­ning more ‘show­room’ stores as on­line sales lift prof­its by 14pc

The Daily Telegraph - Business - - Business - By

Ash­ley Arm­strong TED Baker has strut­ted ahead of its fash­ion ri­vals by de­liv­er­ing a 14pc jump in prof­its for the first half of the year on the back of its am­bi­tion to be­come a global brand.

The busi­ness, which has re­cently opened new stores in Los An­ge­les and Shang­hai, recorded pre-tax prof­its of £25.3m for the six months to Aug 12, com­pared to £21.5m the year be­fore.

Total sales also lifted by 14pc to £295.7m dur­ing the pe­riod, pro­pelled by a 43.8pc surge in on­line sales to £42.7m. Weaker sales in North Amer­ica took some of the gloss off the oth­er­wise up­beat num­bers. Sales growth in the re­gion has slowed from 28.7pc last year to 18.8pc due to “higher lev­els of com­peti­tor pro­mo­tional ac­tiv­ity … and lower in­ter­na­tional tourism”, it said. Peel Hunt an­a­lysts said they be­lieved the num­bers “pointed to neg­a­tive like­for-like sales at store level, but e-com­merce con­tin­ues to grow strongly”.

Ray Kelvin, Ted Baker founder and chief ex­ec­u­tive, blamed dis­trac­tions from when “Trump was at res­i­dence”, re­fer­ring to oc­ca­sions when the US pres­i­dent’s se­cu­rity team shut down much of shop­ping des­ti­na­tion Fifth Av­enue in New York.

Mr Kelvin also said he ex­pected his US busi­ness to be af­fected by the “bad weather in Miami, the floods in Hous­ton, earth­quakes in Mex­ico and the hor­ri­ble at­tack in Las Ve­gas”.

“It’s a dif­fi­cult mar­ket, but we are far­ing bet­ter than any­one else,” Mr Kelvin said of the ar­ray of US chal­lenges.

UK and Euro­pean sales rose by 11pc to £145.6m dur­ing the pe­riod, de­spite the chal­leng­ing con­di­tions. The re­tailer also re­vealed that sales per square foot, ex­clud­ing on­line, inched 1.6pc higher to £439 dur­ing the half year, al­though they were down by 0.3pc in con­stant cur­rency, a re­flec­tion of the weaker ster­ling.

Mr Kelvin said that Ted Baker was more cush­ioned from cur­rency pres­sure than its ri­vals be­cause of its size­able in­ter­na­tional busi­ness, which gave it a nat­u­ral hedge.

He said that the brand’s prod­ucts were “not as price sen­si­tive com­pared to other peo­ple’s so if we need to ab­sorb a cou­ple of ex­tra pounds, we can”. Mr Kelvin said that as yet shop prices had not risen al­though Ted Baker dresses can cost be­tween £159 and £499, sig­nif­i­cantly more than its high street ri­vals. Un­like other re­tail­ers, which have hun­dreds of stores across the UK, Ted Baker has kept a lid on its bricks and mor­tar ex­pan­sion plans and is now open­ing shops in or­der to boost its on­line busi­ness, by us­ing them as show­rooms for what is avail­able on­line and help­ing to ful­fil in­ter­net or­ders with click and col­lect ser­vices.

“We’re full steam ahead with on­line but you have to have shops, peo­ple like to shop and touch and feel prod­ucts. It’s part of do­ing busi­ness and trad­ing,” said Mr Kelvin.

His com­ments came just a day after Aviva In­vestors, Europe’s largest re­tail prop­erty man­ager, pre­dicted the death of the tra­di­tional shop, warn­ing that most bricks and mor­tar stores will be wiped out by the rise of on­line re­tail­ing.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.