Ted Baker set for 17% hike in pre-tax profits

Ted Baker, which began life as a Glasgow shirt shop, is now a global brand
Ted Baker, which began life as a Glasgow shirt shop, is now a global brand
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BRITISH fashion brand Ted Baker will reap the rewards of its recent expansion drive and growing online offering this week when it delivers a double-digit profit hike.

The designer label, whose roots lie in a Glasgow shirt shop business, has bucked the grim economic backdrop by expanding in the United States and Asia as well as closer to home.

Over the key festive trading period its sales surged by a fifth, while the firm also sold more online than in any previous year. Internet sales surged by 50 per cent on the previous year.

Part of the sales boost was down to the chain expanding in the UK. In the eight-week Christmas period alone, it increased its sales floor space by almost 14 per cent.

The group has also been making good progress in expanding into US and Asian markets, while it opened its first store in Toronto just before Christmas.

Analysts have pencilled in a 17 per cent jump in pre-tax profits to £31.6 million when the firm reports on Thursday. The performance would mark a further improvement on the 12 per cent leap seen in 2011.

Analysts at Oriel Securities said Ted Baker’s investment was “paying off”, adding that its efforts to build up its online service were “clearly resonating with the consumer”.

Ted Baker was founded by its London-born chief executive Ray Kelvin, who started the company as a Glasgow shirt store in 1988.

Its retail business currently accounts for some 40 per cent of takings. The group also supplies other retail chains with wholesale products.

Fashion peer Next has already set the scene for decent annual results this Thursday after it weathered difficult high street conditions to post a 3.9 per cent hike in festive sales. That put it on track for profits growth at the top end of expectations, pencilling in a jump of between 7.1 per cent and 9.6 per cent in pre-tax profits to between £611m and £625m for the year to January.

Investors are eagerly awaiting news on whether sales remained robust throughout the winter snow, with some in the City believing the bad weather may see Next post profits at the mid-range of expectations.