ii view: Ted Baker re-establishing its premium brand
Shares for this retailer are down 92% over the last three years but up 15% over the last month.
10th September 2021 15:31
by Keith Bowman from interactive investor
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Shares for this retailer are down 92% over the last three years but up 15% over the last month.
Second-quarter trading to 14 August 2021
- Retail sales up 30% on last year
- Store sales up 142%
- eCommerce sales down 25%
- Retail trading margin up over 5%
Chief executive Rachel Osborne said:
"We have made encouraging progress, with trading over the second quarter in line with expectations, albeit the speed of recovery is different across store locations and regions. Full price sales mix has significantly improved across all our retail channels as we continue to re-establish our premium lifestyle brand positioning.
"Our transformation programme remains on track, and 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 and through our cost savings programme.”
ii round-up:
Ted Baker (LSE:TED) started as a specialist shirt store in Glasgow in 1987.
Today it offers a wide range of collections including menswear, womenswear, accessories, fragrance, footwear, eyewear and watches.
It has over 500 stores, outlets and concessions worldwide, including boutiques in all the major fashion destinations across the UK.
For a round-up of this latest trading update, please click here.
ii view:
In June 2020, the retailer launched a three-year strategic transformation programme. Building on the proceeds of its 2020 capital raising, management is focusing on its strong brand and diversified footprint, including retail, wholesale and licence channels. Major changes of management have been made and its finances strengthened.
For investors, the strength of the group’s brand name remains central. In a recent YouGov survey, it recognised Ted Baker as the second most popular luxury brand in the UK. A recovery in sales over this latest quarter and a significant improvement in the trading profit margin due to reduced sale activity are also highly encouraging. Investment in its online offering continues to be made, with ecommerce sales up 17% compared to the second quarter two years ago. Group net liquidity stood at £105.8 million as of mid-August 2021. But competitors have not been standing still, international tourist travel remains hindered and UK national insurance contributions are set to rise. In all, and with the retailer yet to return to profit, investors may need further evidence of recovery before confidence returns.
Positives:
- Transformation programme ongoing
- Strong brand name
Negatives:
- A reported loss over the last financial year
- Dividend halted
The average rating of stock market analysts:
Strong buy
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