Ted Baker will outwear slump

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TED BAKER is a good example of a fashion retailer that has grown by bucking the trend. It claims to "lead fashion rather than follow it".

No doubt the retailer, which listed less than 18 months ago, would like to buck another trend - the falling share prices of menswear retailers. The reason is that market sentiment suggests that menswear will be one of the first casualties of a recession. Ted Baker yesterday sought to dismiss this, saying its customers would find pounds 50 for the latest shirt even in hard times.

Ted Baker's sales have looked solid, with turnover in the first-half of the year up 41 per cent and profits up 18 per cent. Its strategy is one of steady growth, not by opening more than its seven current stores but by looking for new markets.

Ted Baker will not be recession proof, but its young customers, cult status, and growth strategy makes it less vulnerable than the Austin Reed's of this world. SG Securities forecasts pounds 6.8m profits and an increased earnings per share of 11.3p for the year to January. At yesterday's closing price of 91.5p that puts it on a forward multiple of 8.2 times; a justifiable premium to its peers. Hold.