Ted Baker profits rise despite drop in household spending

Popular British fashion brand Ted Baker has seen an increase in sales for the first half of the year, posting pre-tax profits of £25.3 million.

Despite ‘challenging’ conditions, Ted Baker has managed to broaden its appeal and experienced relatively good ecommerce sales.

The retailer boasted an uptick in online spending of £13million compared to last year’s numbers.
Ted Baker performed well globally, but US sales slumped slightly compared to 2016.

Lower footfall in stores doesn’t appear to have impacted the company, but chief executive Ray Kelvin acknowledged that trading conditions have been challenging.

He said: ‘Whilst trading conditions in some of our markets remain challenging, we are confident of making further progress for the full year, in line with our expectations.’

Ted Baker now has more international appeal so the increase in profits is not solely based on UK customers’ expenditure.

The sharpest sales growth this year has been through Ted Baker’s Asian arm and it looks as though it will continue to rise with new stores opening later this year in Qatar, Malaysia and India.

The origins of the, now worldwide, company can be traced to Glasgow in 1987 where the company was launched as a shirt specialist.

The company choose not to advertise but have still managed to build their brand from a men’s shirt shop to an all encompassing brand that sells clothes, accessories and shoes to both sexes.

American sales go against the trend and have suffered this year- down almost ten per cent compared to last year.

The company has hailed ‘higher levels of competitor promotional activity’ and lower international tourism as the reason for this dip.

Ted Baker is however continuing its North American expansion and has stores opening across the country in both Houston and Los Angeles.

Neil Wilson of ETX Capital was not confident that Ted Baker reflected the wider UK retail market. He said: ‘This is more and more a global brand rather than a straight British high street retailer.

‘Its push overseas is clearly paying off and the growth looks sustainable and manageable.’

Ted Baker has done well in half-year profits with online shop accounting for £42.7 million sales.

Ted Baker has done well in half-year profits with online shop accounting for £42.7 million sales.

‘Its controlled approach to distribution and the focus on brand should continue to put it on a strong footing.’

Following the Brexit vote, retailers have been struggling with rising import costs for goods and rapidly deteriorating consumer confidence.

But Ted Baker appears to have bucked the trend by keeping product prices the same, which could account for the 14 per cent rise in revenue.

In January, Mr Kelvin vowed shoppers would not be subjected to price hikes with the combination of hedging against currency fluctuations and a dollar-denominated income from its US operations helping to mitigate the collapse in sterling.

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