Ted Baker has reported strong group revenue growth for the 52 weeks to January 30, 2010, despite its wholesale division experiencing negative growth. Indeed, a 15.4% increase in group retail sales drove a 7.2% rise in group revenue. While the retailer should now look to capitalize on growth opportunities in the UK and Europe, as well as further afield, it must ensure it protects its brand image.
Ted Baker's strong group performance was matched by its UK/Europe results, which saw total revenue and retail revenue up 8.0% and 17.3%, respectively.
Sales from this region were boosted by a 14.7% increase in average space, which included the opening of 27 new concessions and one new store at Heathrow Terminal One.
Although space was the main driver of sales growth, results imply that other factors also contributed. The Ted Baker brand is particularly strong in the UK, offering unique, fashionable products for both men and women. Furthermore, the retailer has made additional enhancements to its transactional website in the period, continuing to develop this channel of its business.
Internationally, the company continues to expand, opening its first store in Boston, Massachusetts and a further outlet store in Orlando, Florida, increasing average space in the US by 6.9%. However, worryingly, despite this space expansion US sales for the period were down 16.3%. Ted Baker also continues to expand its presence in the Middle East, Asia and Australasia - opening second stores in both Taipei and Melbourne.
Globally, both menswear and womenswear drove positive sales growth, although womenswear sales were up 14.5% (compared to an increase of 1.6% in menswear) due to the transfer of wholesale accounts to concessions in womenswear. Menswear sales, on the other hand, were boosted by the launch of the new casualwear range, Born by Ted Baker.
Although the retailer has 151 concessions in the UK and Europe, with only 33 standalone stores there are still many opportunities for expansion. Moreover, once the global economy improves, international expansion will provide the fashion retailer with further long-term growth. However, with such a poor performance in the US, the retailer needs to consider its future expansion plans in this market. While the company is expanding through its own stores and licensing deals, it must ensure that it protects its strong brand image, which is essential to its success.
Source: Verdict Research