Ted Baker shrugs off forced hugging allegations with sales boost
TED BAKER shares have soared more than 30pc after a Christmas sales boost reassured investors that allegations of “forced hugging” by the brand’s founder failed to deter shoppers.
The fashion retailer posted a 12.2pc rise in sales over the five weeks to Jan 5, beating City forecasts. Online sales jumped by 18.7pc and now represent more than a quarter of total retail sales. Analysts at Peel Hunt said that the figures implied a 4pc rise in like-for-like shop sales, meaning that it had “moved into positive territory for the first time in a while, suggesting a “particularly strong store performance for Ted Baker”.
The brand said despite the “backdrop of increased promotional activity” its gross margins and profits remain in line with expectations. Analysts at GlobalData said Ted Baker’s sales jump after a disappointing third quarter meant “premium lifestyle brands still hold appeal for consumers as mid-market retailers continue to suffer”.
“Not even the allegations surrounding the retailer’s founder Ray Kelvin seem to have diminished desire for the Ted Baker brand or noticeably impacted its performance,” added Emily Salter at GlobalData. Following a terrible autumn, many retailers offered deep discounts in the run-up to Christmas in a bid to revive sales, putting pressure on margins.
Ted Baker’s acting boss, Lindsay Page, said: “The brand has delivered a good performance across our stores and ecommerce business, despite continuing challenging external trading conditions across our markets.” Mr Page, former chief operating officer and finance chief, took over as chief executive after Ray Kelvin volunteered to take a leave of absence after the company said in December that “further serious allegations” about his conduct had been received. The 62-year-old founder has come under fire for alleged inappropriate behaviour with employees that ranges from “forced hugs” to straddling a female employee. Ted Baker said the independent investigation by law firm Herbert Smith Freehills was “progressing” and an update would be made in due course.
Shares, which fell below £13 in December when the allegations of the “forced hugging” regime surfaced, closed 504p higher at £21.20.
Elsewhere, casual fashion retailer Fat Face suffered a 6pc drop in UK store sales over the five weeks to Jan 5 as more shoppers shifted online.