Ted Baker warns over 'increased economic uncertainty'

James Thompson
Friday 03 October 2008 00:00

The fashion brand Ted Baker bucked the retail gloom yesterday with robust profits and sales, but its share price tumbled by 2.4 per cent after it warned of the recent impact of "increased economic uncertainty".

Ted Baker, which mainly targets 16-to-40-year-olds with its trendy, upmarket designs, has so far emerged largely unscathed from the credit crunch.

But yesterday the fashion brand, which has 29 retail stores and 92 concessions in the UK, warned that "trading in the last two weeks has been adversely affected by both the increased economic uncertainty and by unseasonably warm weather in contrast to a period of cold weather last year".

For the 28 weeks to 9 August, Ted Baker posted pre-tax profits up by 5.4 per cent to £7.4m, on total sales up 8.2 per cent to £71.6m. Ted Baker generates the bulk of its revenues from retail sales, but also has wholesale and licence businesses. Its shares closed at 337p.

Ray Kelvin, Ted Baker's founder and chief executive, cited its strong multi-channel distribution strategy and "careful international expansion". But he said: "We remain understandably cautious about trading in the second half of the year."

Ted Baker has eight stores in the US, as well as 17 stores and concessions in the Middle East, Asia and Australia.

Matthew McEachran, the Kaupthing analyst, said: "Their collections have continued to improve and widen. It is the product presentation and service... that they do exceptionally well and they have been getting better at it."

Ted Baker said that retail sales rose by 17.5 per cent, as it opened more space in the UK, and licence income jumped by 26.1 per cent.

However, its wholesale sales fell by 12.1 per cent as some wholesale customers struggled. Ted Baker said it is transferring some wholesale accounts to retail concessions.

This year, Ted Baker opened retail stores in locations including London's Cheapside, Heathrow Terminal 5, Belfast, Cambridge, Bristol and Liverpool, and will open two new stores in London's White City, including a luxury new format, Ted Baker Pashion.

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