Ted Baker to reveal turnaround progress as closures weigh on half-year sales

Ted Baker is set to reveal the progress of its turnaround plans as the fashion retailer is also expected to post a slump in sales following enforced store closures.

The retailer will share the impact of the tightening of pandemic restrictions in recent months with its investors in an update on Monday.

It comes after a grim week for high street retailers which has seen rival Arcadia Group slide into administration, casting a shadow over the future of its 13,000 staff.

Ted Baker investors will be particularly keen to hear how it is moving forward with transformation targets it announced in June, in a bid to arrest potential losses.

Ted Baker
Ted Baker

In July, the London-listed company said it planned to cut at least 500 jobs – more than a quarter of its workforce – as part of its turnaround plan.

It came only six months after Ted Baker had announced 160 separate redundancies, to reduce costs.

It also said it plans to streamline its supplier base to about 100 firms, simplify its organisational structure and limit capital investment to £15 million annually.

“Even the best cost controls in the world can’t make up for a severe lack of sales though, and ultimately it’s the sales numbers which will be key to longer term recovery,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

“Ted Baker is feeling the pain because of its emphasis on occasion wear.

“Buying expensive new outfits holds a lot less appeal at a time when everything from weddings to birthday bashes and Christmas parties have been cancelled, drastically downsized or held virtually.”

In its most recent sales update, the group said store sales crashed 79% in the 11 weeks to July 18 following the first raft of lockdown measures.

However, it also revealed a better-than-expected surge in online sales, which jumped by 35% over the period.

Sentiment among traders during England’s second national lockdown improved dramatically, as investors held out hope that vaccine progress could aid Ted Baker’s recovery.

Shares in the business have risen by more than 70% since the start of November as a result, although they still remain more than 50% lower than their position at the start of the year.

Nevertheless, analysts at house-broker Liberum said its online performance has been “very strong” and puts it in a good position to recover in the long-term.

He added: “We believe Ted Baker remains a strong global lifestyle brand with significant potential, supported by the new management team’s clearly defined strategy that will evolve the group into an agile business that can meet the demands of a fast changing consumer landscape.”