Ted Baker the latest chain to take a hit from the collapse of House of Fraser

FASHION CHAIN Ted Baker has become the latest firm to reveal a hit from beleaguered department store chain House of Fraser as it posted lower half-year sales and profits.

The retailer said pre-tax profits fell 3.2 per cent to £24.5m in the six months to August 11, with the group writing off £600,000 owed by House of Fraser, which collapsed into administration in August and has since been bought by Sports Direct.

Ted Baker saw UK and European retail sales growth slow sharply to 1 per cent, or 0.7 per cent with exchange movements stripped out, as the House of Fraser woes and extreme weather took its toll.

High street store sales plummeted 10.4 per cent per square foot in constant currency, although this was offset by a 22.9 per cent jump in online sales.

The group said sales were hurt in particular by dismal trading in its House of Fraser concessions leading up the department store’s collapse, as well as the “unseasonable weather” in the half-year.

It also warned that hotter than usual weather across the UK, Europe and East Coast of America had affected trading in September. “In addition, trading in the UK has been impacted by the well-publicised challenges facing some of our trading partners,” it added.

Its results show that on an underlying basis and with one-off costs such as the House of Fraser hit stripped out, pre-tax profits rose 3.5 per cent, to £25m. Group sales lifted 3.5 per cent or 5.5 per cent, on a constant currency basis, to £306m thanks to a better performance in its wholesale and licence businesses – with revenues up 12.8 per cent and 11.7 per cent respectively. It also said it remained committed to the beleaguered UK high street as it stuck by plans to open another two stores in Britain.

While online sales now account for 29 per cent of UK and European retail revenues, the group said its stores “remain key to success of the e-commerce business”.