British fashion sells abroad: Ted Baker up 15 percent
Friday, 05 October 2012
British designer clothing brand Ted Baker has reported a 15 percent rise in first-half revenue, helped by strong sales in the United States. U.S. retail sales were up 53 percent to 25.6 million dollars, on total revenue of 118.6 million pounds. Meanwhile,
sales in the UK and the rest of Europe rose 7.9 percent."We
expect it to perform really well and to present the brand on what is a fantastic showcase for the U.S. and for the world," Finance Director Lindsay Page told Reuters, noting that the U.S. was now Ted Baker's biggest market outside the UK.Up to now, a quarter of Ted Baker's sales came from overseas, up from 20 percent a year ago, Page said. Online sales jumped 82 percent and made for roughly 5 percent of total sales.
Founder and chief executive Ray Kelvin said in a statement: “We have delivered good results in a challenging environment while making important investments for the long-term development of the brand, including opening new stores in Tokyo and on Fifth Avenue, New York.”
"While Ted Baker is doing very well in a tremendously tough domestic market, its startling overseas and e-commerce performance shows that the future of retail is both global and online," points out Jaana Jätyri, chief executive of fashion trend forecaster Trendstop.com.
She added how "Launching into new markets such as North America, Hong Kong, China and Japan where British heritage and quality are revered, has been pivotal to Ted Baker’s strategy. In this sense, its approach has been very similar to that of Burberry but at a more inclusive price.”
Profit before tax rose 10.4 percent to 9.4 million pounds, excluding a one-off cost of 1.6 million pounds relating to the opening of two of the new stores, explained the company when presented its figures.
Total revenues rose to 118.6 million pounds from the previous 102.8 million pounds. Aimed to rewards the loyalty of its investors, Ted Baker grew its interim dividend by 10.5 percent to 7.9 pennies.
Seymour Pierce analyst Freddie George says the company is "fairly valued" and retains his 'hold' stance on the stock and price target of 850 pence. "Ted Baker appears to be accelerating development overseas through new stores and concessions, which should boost earnings growth over the medium term. This strategy does however, increase the risks of disappointment," he notes in a communication to clients.
Ted Baker’s bid for womenswear is also paying off, as this category saw sales rocketing by 24.5 per cent at to 66.1 million pounds, representing 55.7 per cent of total sales. This compares to menswear sales that were up 5.7 per cent to 52.5 million pounds.
Despite the good news, the company remains cautious about the rest of the year given the uncertainty in the global economy. It stressed that full-year results would depend on trading in the second half, which includes the Christmas holiday season.
"Robust is bordering on understatement. This strong set of numbers confirms yet again why Ted Baker is the dark horse of retail. "Kelvin is right to remain cautious given the volatility in the global economy, but his brand is well positioned to do better than most in the short to medium term,” concludes Jätyri.
