Scottish founded fashion giant Ted Baker says UK stores likely to remain closed until end of May

Ted Baker, the British fashion label with Scottish roots, has revealed a Brexit bill of up to £5 million as a slump in festive sales also laid bare the toll taken by the pandemic.

Ted Baker was founded as a single shirt shop in Glasgow in the late 1980s and has grown into a global ­fashion empire.

The group said the predicted Brexit costs came as it faces extra duty and shipping costs following the UK’s departure from the EU, which will only be “partially offset” by new customs warehouse capability.

Retail sales nearly halved in its crucial Christmas trading quarter, falling 47 per cent in the 13 weeks to January 30 as lockdowns and restrictions hit trading.

It was also knocked by significantly lower numbers of shoppers on the high street when stores were open, as well as a slump in demand for its Christmas staples such as coats and party wear.

Ted Baker was founded as a single shirt shop in Glasgow in the late 1980s and has grown into a global ­fashion empire.

The group is pressing ahead with the launch of a new online sales platform at the end of the first quarter as it looks to ramp up its internet trade in the face of the high street downturn.

It saw group e-commerce sales dip 1 per cent despite the shift online across the retail industry, though its online trade now accounts for 63 per cent of total sales, up from a third a year ago.

Directly-operated online sales rose 2 per cent in the period after the firm improved its payment method options and upped investment in digital media.

Chief executive Rachel Osborne said: “While we have made encouraging strategic progress, trading over the fourth quarter was difficult and heavily impacted by the Covid pandemic, leading to the closure of many of our stores during the period and a lack of demand for outerwear and occasionwear over the festive season in particular.

“Looking forward, we are taking a cautious planning approach and now assume that UK stores will remain closed until the end of May followed by a gradual recovery over the rest of the first half.

“Despite these challenges, our robust balance sheet and strong cash position leave us well placed for the future and we remain confident that Ted will emerge from Covid a stronger and more resilient business.”

Sophie Lund-Yates, equity analyst at financial services firm Hargreaves Lansdown, said: “Lockdowns are tough for any bricks and mortar retailer, but Ted Baker is facing the perfect storm. Its brand is synonymous with wedding-guest, occasion and work wear, which is not what people buy during a pandemic.

“Added to that is the group’s lack of presence in out-of-town retail parks, which is where footfall has shifted in areas were shops are allowed to open. Add all that up, and you get free falling sales.

“Ted Baker wasn’t in the greatest position before the crisis, meaning coronavirus has simply added weight to already tired shoulders. A loose handle on stock management and a disappointing online business meant profits were already feeling the effects of falling high-street footfall. The latter is particularly worrying as the pandemic has accelerated the shift to digital shopping.”

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