Ted Baker posted a strong first-half performance. Here analysts highlight the most important points from the fashion group’s update.
“The majority of lifestyle brands trade from over 1,000 doors globally, whereas Ted has a current footprint of circa 400 doors with Europe, the US, Middle East and Asia all offering significant future growth potential.
“Taking a steady approach to expansion, the brand continues to benefit from
double-digit like-for-like sales growth backed by a strong contribution from new space.”
John Stevenson, Peel Hunt
“We continue with our positive view of the company based on its growth opportunities. Ted Baker should see further strong momentum in womenswear, which now accounts for 59% of sales.
“It is also, in our view, very much in the early stages of an international roll-out strategy. In the period, it opened two stores in the UK, one in France, one in the US and further concessions in Spain, France, Holland, the US and Japan.
“In addition, it has significant opportunity to grow on-line sales, which grew by 49% in the period.
Freddie George, Cantor Fitzgerald
“At £14m, e-commerce accounted for approximately 10% of Ted Baker’s retail sales. This is a higher proportion than we are accustomed to seeing in the premium market, where online momentum has historically lagged.
“With a firm commitment to ‘affordable luxury’, Ted Baker’s approach to e-commerce defies the luxury culture that has traditionally resisted online retailing.
“In this way, although it continues to represent a more viable fashion option for the average purse, Ted Baker joins the likes of Burberry in transforming attitudes to the digital age at the top end of the market.
“For Ted Baker, a self-described “lifestyle brand”, communicating brand identity is a priority and, at a time where brand messages are most efficiently communicated on the internet, the company has been keen to capitalise on the trend to online shopping.
“Ted Baker’s focus on brand transmission will prove particularly effective as it continues to pursue expansion in Asia, where luxury culture is not defined by quiet elitism, as it is in the West, but by big brands with big reputations.”
Anusha Couttigane, Conlumino
“The company has an excellent track record of self-funded, disciplined growth, delivered once again in the past half year.
“Sales growth was particularly strong in the UK and Europe, up 16.7%. Sales in the US and Canada rose 19.3%; the underlying constant currency figure of 31.3% underlines the growth potential that remains here.
“It is a similar story in the Middle East, Asia and Australasia where headline sales of 16% mask constant currency sales of 26.0%.
“The business is clearly in rude health. Full-year capex guidance is maintained at £25m and a revolving credit facility has been renewed six months ahead of schedule.
“All this speaks of sound fiscal discipline. In addition to store and concession openings and refurbishments the company continues to invest in the roll out of a new IT system across the business which will support the next stage of growth.”
Tom Gadsby, Liberum
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