Ted Baker to spell out impact of coronavirus amid retail sector restructuring
Analysts believe the firm is likely to have suffered because of its focus on clothing for events such as weddings and parties, which have largely been cancelled or drastically scaled back amid the crisis.
Ted Baker, which was founded as a single shirt shop in Glasgow in the late 1980s and has grown into a global fashion empire, warned during the summer that trading had been “significantly impacted” by the pandemic. It is due to update investors on its half-year results and recent trading conditions this week.
Susannah Streeter, senior investment and markets analyst at financial services group Hargreaves Lansdown, said: “With the domino effect of the collapse of Arcadia taking out Debenhams, UK fashion retail is facing a dark moment.
“Ted Baker is feeling the pain because of its emphasis on occasion wear. Buying expensive new outfits holds a lot less appeal at a time when everything from weddings to birthday bashes and Christmas parties have been cancelled, drastically downsized or held virtually.
“In the summer, sales had been in freefall, as growth in e-commerce failed to offset the plunge in retail sales during lockdown.
“Trends may have improved a little since then, although the most recent closures of non-essential stores will hardly have helped.
“There are levers Ted can pull to improve performance,” she added. “Cost reduction is a big one. Head office and store staff savings are both on the agenda, as is a tighter grip on inventory.
“Even the best cost controls in the world can’t make up for a severe lack of sales though, and ultimately it’s the sales numbers which will be key to longer term recovery.”
In March last year, Ray Kelvin resigned as chief executive of Ted Baker in the wake of harassment allegations.
Kelvin, who founded the business in 1988 with a single store in Glasgow, was forced to take a leave of absence amid claims that he enforced a “hugging” culture at the company.