The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit) Regulations 2019.
11 February 2021
Ted Baker Plc ("Ted Baker", the "Group")
Q4 / Pre-close trading update
For the 13-week period from 1 November 2020 to 30 January 2021 ("the Period")
Transformation plan on track despite COVID disruption
Ted Baker Plc, the global lifestyle brand, today provides an update on trading for the 13-week period from 1 November 2020 to 30 January 2021.
Rachel Osborne, Chief Executive Officer, commented:
"We continue to make strong progress on our transformation programme, delivering against all of our year-one operational targets. Over the period, we have moved forward on the three key pillars of our plan in refreshing and re-energising the product and brand, prioritising digital and capital light growth with the announcement today of a further licensing partner and through our cost savings programme.
"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."
Q4 trading and financial highlights:
• Group revenue fell year on year by 47% for the Period. The Group has seen a material negative impact from the COVID pandemic. This includes the closure of the entire UK store portfolio for the majority of the trading period as well as large parts of our international store portfolio and, when stores were open, footfall shifted towards out-of-town and neighbourhood retail locations where we have minimal physical presence. In addition, sales have been adversely affected by a decline in outerwear and occasionwear demand during the Christmas period.
o Reported Retail sales decreased 47%, reflecting a material decline in footfall and stores being closed for part of the Period and selective permanent closures where commercial lease agreements could not be reached with landlords.
o Directly operated eCommerce sales increased 2%, despite the lack of demand for outerwear and occasionwear, reflecting enhanced payment methods, improved trading mechanics and increased investment in digital media. Group eCommerce sales decreased 1% and represented 63% of total retail sales (2020: 33%).
o Wholesale and licence revenue decreased by 44%. The performance reflects cautious ordering from store-based trustees since the beginning of COVID and Brexit related shipping delays towards the end of the period.
o The China, Hong Kong and Macau JV continues to see robust sales growth, with 14% sales growth during the period and 33% on mainland China.
• As of 30 January 2021, net available liquidity was £199.7m comprising £66.7m of cash and £133m of bank facilities. The Group did not draw on any bank facilities during the period. The Group has material liquidity headroom against anticipated peak cash requirements in September/October 2021.
Q4 strategic and operational highlights:
• The Group is pleased to announce a new licencing agreement demonstrating ongoing progress on its Digital and asset light growth strategy:
o Bedeck as a new product licence partner for bedding and towels. Bedeck will take on the category from January 2022, with a key priority to expand the global reach of Ted Baker with these products.
• Territory licencees and JV partners have opened a combined 3 new stores during the period.
• New Global Creative, Anthony Cuthbertson, joined the Group in mid-November 2020 and has worked quickly with the design teams on refreshing and reenergising the product and brand. The new design team's first full collection will be the AW21 collection. This has been shown virtually in our newly re-designed head office showroom and initial feedback has been encouraging.
• Our casual offer has been sought out by our customers. Sell through rates have been above average on tops, trousers, accessories and footwear.
• The Ted Baker brand continues to show healthy momentum with web traffic up 17% and new customer growth was +8%.
• A new eCommerce platform, which will significantly improve functionality and flexibility remains on track for launch at the end of Q1 2021.
• Cost savings identified during the year have been achieved across payroll with an annualised saving of £31m and rent savings of £3m in line with our upgraded targets.
Group trading has continued to be negatively affected by COVID-related restrictions, with material negative impact from physical store closures across Retail and Wholesale channels. The Group now assumes an ongoing materially negative impact across both channels from store closures until end May 2021, followed by a phased recovery until the end of the first half.
Following the trade agreement between the UK and EU signed in late December 2020, the Group anticipates up to £5m of incremental costs associated with Brexit, reflecting extra duty and shipping costs partially offset by a new customs warehouse capability.
Ted Baker will announce its results for the 53-week period ended 30 January 2021 on 27 May 2021.
Ted Baker Plc
Tel: +44 (0) 20 7255 4800
Rachel Osborne, Chief Executive Officer
David Wolffe, Chief Financial Officer
Tel: +44 (0) 20 7353 4200
Jonathan Sibun/Jessica Reid
Media images available for download at:
Cautionary statement regarding forward-looking statements
This announcement contains certain forward-looking statements. These forward-looking statements include matters that are not historical facts or are statements regarding the Group's intentions, beliefs or current expectations concerning, among other things, the Group's results of operations, financial condition, liquidity, prospects, growth, strategies, and the industries in which the Group operates. Forward-looking statements are based on the information available to the Directors at the time of preparation of this announcement and will not be updated during the year. The Directors can give no assurance that these expectations will prove to have been correct. Due to inherent uncertainties, including both economic and business risk factors underlying such forward-looking information, actual results may differ materially from those expressed or implied by these forward-looking statements.