[News] Cautious Ted Baker sees signs of H2 improvements as retail and womenswear continue to impress

WGSN 08.10.09
A cautious Ted Baker said Thursday it expects to see improvements in H2 despite a still-fragile economy, as H1 profits for the UK fashion brand fell a better-than-expected 18.4%.

Pre-tax profit came in at £6m ($9.5m) for the 28 weeks to August 15, down from £7.4m a year ago as total revenues increased 7% to £76.6m. Retail sales jumped 15% to £61.3m on average selling space up 16.1%. Its core UK ops performed ahead of expectation, it noted.

It said the US market remains challenging, however, and sales for the period in its retail division there fell 23.8% to $8m.

Ted Baker Womenswear delivered a strong performance for the period with sales up 17.9% to £36.9m. Womenswear now represents 48.2% of total sales compared with 43.8% a year ago.

The company said Menswear also delivered a good result with sales of £39.7m, down 1.5% on the prior year. The unit now represents 51.8% of total sales compared with 56.2% a year ago.
Retail now represents 80% of total turnover compared with 74.5% a year ago.

As anticipated, wholesale sales fell 16.3% in H1, due in part to the difficult trading conditions experienced by some of its wholesale customers, it said. However, the company continues to transfer some wholesale accounts to retail concessions.

"The group's performance in the first half…has been better than expected given the difficult trading environment. This trend has continued into the second half," said founder and chief executive Ray Kelvin, who also noted initial reactions to its autumn/winter collections had been encouraging.

For H2, easier comparisons with a year ago and continuing stronger retail sales will contribute to a more positive outlook, he said.

Meanwhile, finance director Lindsay Page told Dow Jones Newswires Thursday: "A lot is going to depend on what happens when we anniversary against the very difficult time of last year between October and November, but I think we will see an improvement, although I don't think anyone's thinking it's going to be a very good time.

"The comparatives may be easier but there's still a need to be cautious as the economic situation still isn't particularly good," Page added.

Page said Ted Baker wouldn't drive sales through discounting ahead of Christmas. He also said: "The retail side of the business makes its money in the second half but it's good to be slightly cautious."

New retail stores included an opening in Orlando, Florida, during H1, while further openings are planned for London Heathrow Terminal 1, Boston and Melbourne in H2.

source:WGSN