Ted Baker defies high street gloom but warns recent bad weather has hit sales

Retailer reports positive figures for last year but warns of ‘challenging’ market conditions

Recent poor weather hit Ted Baker sales (Reuters)

Ted Baker defied the current gloom on the high street to post an 11 per cent hike in revenue for last year, but warned recent bad weather has affected trade in key markets.

The retailer increased revenue to £591.7m from £531m in 2016, while pre-tax profit rose 12 per cent to £68.8m from £61.3m.

The group has proposed a dividend hike of 12.1 per cent, making a total of 60.1p per share for the year.

However, shares dipped at the open as Ted Baker said recent unseasonal weather across Europe and the East Coast of America has had an impact on the early part of trading for the spring and summer season.

“We anticipate that external trading conditions will remain challenging across many of our global markets,” the company said.

The firm added that it plans to spend £30m on expansion plans over the year, which will go towards continued investment in new IT systems and more store openings and refurbishments.

Ted Baker founder and chief executive Ray Kelvin said: “The group’s good performance demonstrates the strength of the brand as well as the quality and appeal of our collections.

“Our new collections have been received positively and although we anticipate external trading conditions will remain challenging across many of our global markets, the strength of our brand and business model mean that we remain well positioned to continue the group’s momentum and long-term development.”

He added: “We have a clear strategy for growth across both established and new markets which is underpinned by our controlled, multi-channel distribution as well as the design, quality and attention to detail that are at the heart of everything we do.”

Charlotte Pearce, retail analyst at market researcher GlobalData, said: “While the latest news of struggles at Moss Bros, New Look, Mothercare and Carpetright has further ignited concerns over the state of retail in the UK, Ted Baker’s latest results provide a glimmer of hope as the premium lifestyle brand continues to build on its successes.

“While UK and Europe accounted for over two thirds of fiscal year 2017-18 retail revenue, Ted Baker has demonstrated it has strong global appeal with the US and Canada outperforming – this accounted for 27.1 per cent of retail revenue in the period, and the retailer has also seen strong performance in its North American wholesale business.

“By generating a decent proportion of sales from international markets, Ted Baker will be more protected considering the tough UK retail climate and its focus on wholesale is wise as it allows the retailer to grow the brand internationally without overextending itself in newer markets.

“Ted Baker’s attention to e-commerce and its focus on its multichannel strategy will enable it to stand out in a crowded market in 2018. The retailer continues to make strategic steps to support its future growth and development, particularly online, as it has recently moved to a single European distribution centre in the UK and is integrating an enterprise resource planning system which will improve efficiency across the business. Offline, Ted Baker continues to invest in both new and existing stores, helping to ensure it remains a destination for shoppers to visit.”