Hopes that return to offices will boost Ted Baker's half-year sales
The group reports half-year figures on Thursday and is expected to reveal that its high-street stores have benefited from increased footfall in towns and cities.
However, Nicholas Hyett, equity analyst at Hargreaves Lansdown, said it remains to be seen if shoppers have been splashing out on the group’s formal and event-driven clothing.
“In particular the group has struggled to get buyers to pick up clothes at full price after a period of heavy discounting last year. Developing a reputation for regular sales is a surefire way to trash margins – so recovering a premium position is crucial longer term,” he said.
“Online sales are also worth close scrutiny. Digital sales are increasingly the norm in fashion retail across the spectrum – but Ted has lost ground now prices have returned to normal. If that trend continues into the third quarter, the group will face serious questions.”
In September, management said it would be relying less on heavy promotions and focusing on trying to sell more clothes at full price under a recovery plan.
The retailer said the strategy has seen online sales fall but managers remain unconcerned as the business recovered strongly following the end of Covid-19 restrictions.
Sales in the 16 weeks to August 14 rose 50 per cent compared with the same period a year previously – when stores were closed for some of the time during the first national lockdowns.
But they remained below pre-Covid levels, with store sales down 45 per cent on the same period in 2019. Online sales fell 25 per cent year on year.
Bosses were upbeat, however, revealing that more recent sales had been impressive with much of the growth coming from out-of-town and shopping centre sites.
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 recently announced that non-executive director Andrew Jennings will step down with effect from January 29 after eight years in the role.
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