Ted Baker upbeat despite slowdown in retail sales

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The Independent Online

A slow start to the year for Ted Baker, the fashion retailer, prompted a string of profits downgrades yesterday that knocked the group's shares.

A slump in wholesale orders overshadowed strong results from the quirky retailer that is expanding across the Middle East, Asia and into the US.

Ray Kelvin, the chief executive and founder, attributed the 15 per cent fall in wholesale orders to a late Easter and the recent cold snap. "We'll be there or thereabout come the full year," he said.

Retail sales have risen 5.3 per cent during the first seven weeks of its year, a slowdown from its performance over Christmas. Analysts estimated that underlying sales were flat during the period.

Analysts shaved up to 10 per cent off their numbers for the current year because of the lacklustre start for retail and wholesale sales. Unless wholesale revenues pick up, forecasts could be under further pressure in the second half, they warned.

Shares in the group, a perennial outperformer, tumbled 27p to 508p, but the prospect of a share buy-back programme limited the slide. Ted Baker, whose biggest shareholder is Mr Kelvin with a 40.3 per cent stake, said it plans to buy back up to 10 per cent of its shares.

Mr Kelvin predicted the group would have up to 70 stores across the Middle East and Asia in five years time after two recent franchise deals. "Ted's gone global but we're doing it with O.P.M. - other people's money," he said.

In contrast, the company is opening its own stores in the US. "It's easier there because they speak English,' Mr Kelvin added. Its next outlet will open in Orange County, California, in line with its aim of adding between 20 and 30 stores over the next three years in the US.

It has six stores after recently closing one in Miami.

In the 12 months to 28 January pre-tax profits rose 13 per cent to £18.4m on sales up 11 per cent at £117.8m. Gross margins slipped to 58.4 per cent from 59 per cent.

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