Profits dropped at fashion house Ted Baker today as it blamed “challenging trading conditions”, with no let up expected for the latter half of the year, sending shares sliding around 12 per cent in early morning trading.
Read more: Moss Bros issues profit warning
Ted Baker saw profits before tax dip 3.2 per cent year on year to £24.5m for the first half of its financial year, though revenue climbed 3.5 per cent to £306m for the six months through to the end of August.
Basic earnings per share also fell almost two per cent to 42.8p, with retail sales flat, growing 1.1 per cent to £220.1m.
Why it’s important
Ted Baker joins other high street fashion retailers like Bonmarche and French Connection in suffering from a lack of footfall to the high street.
Like Moss Bros last month, Ted Baker has blamed Britain’s sweltering summer for a lack of interest among shoppers, as well as The Beast from the East for the cold weather earlier in the year.
Menswear sales dropped by three per cent to £115m and womenswear sales were up almost eight per cent to £191m.
UK and Europe retail sales were up just one per cent to £147.1m, though UK wholesale revenue grew 10 per cent to £54.9m.
US takings were up two per cent to £62m, while Ted Baker’s rest of world sales fell two per cent to £11.2m.
Despite this, the clothing company is continuing to roll out new stores, with two planned in the UK, two in Germany, one in France and three in the US.
However, shoppers were moving away from the high street as they shopped increasingly online, with Ted Baker’s e-commerce sales rising by 24 per cent to take in £53m.
What Ted Baker said
David Bernstein, non-executive chairman, said:
We have a very clear strategy for the continued expansion of Ted Baker as a global lifestyle brand across both established and newer markets. Our flexible business model ensures that our customers have multiple channels to engage with the brand. Our growing e-commerce business, underpinned by stores that showcase the brand, mean that we are well positioned to deal with the structural changes in an evolving retail environment and continue Ted Baker's long-term development.
The board is mindful of the uncertainties in its markets over the second half of the year, but remains focused on making further progress for the full year. We intend to make our next trading update, covering the period since the start of the second half of the financial year, in early December.