Ted Baker has warned it faces £5m of additional costs associated with Britain’s exit from the EU as it grapples to revive its fortunes.
The fashion retailer said extra duty and shipping costs would only be “partially offset” by new customs warehouse capability.
Ted Baker cautioned of the additional outgoings as it revealed that revenues raked in during its crucial Christmas quarter almost halved as coronavirus-enforced lockdowns battered sales.
Group sales slumped 47% year on year during the 13 weeks to January 30 following a “material negative impact” from the Covid-19 pandemic.
Ted Baker’s entire UK portfolio and most of its international stores were shut for the majority of the retailer’s fourth quarter.
It said that when stores were allowed to open footfall shifted to out-of-town and neighbourhood locations where the business has “minimal physical presence”.
Reported retail sales dropped 47% during the period, with online sales made through Ted Baker’s directly operated digital platforms rising just 2%. Group ecommerce sales as a whole dipped 1%, but represented almost two thirds of total retail sales, compared with 33% a year ago.
Ted Baker hailed “robust sales growth” of 14% from its China, Hong Kong and Macau joint venture, as the region continues to bounce back from the Covid-19 crisis. Sales in mainland China surged 33% during the period.
Ted Baker boss Rachel Osborne insisted the business made “strong progress” on its transformation programme despite the slide in sales.
She added: “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.”
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