• H1 pre-tax profit increases14.6% to GBP17.8m (US$27m)
  • Retail gross margin flat at 64%
  • Group revenue climbs 24.5% to GBP226.8m
Ted Bakers sales in the UK and Europe grew 14.7%

Ted Baker's sales in the UK and Europe grew 14.7%

Lifestyle brand business Ted Baker has revealed “strong” first-half sales and earnings thanks to growth in e-commerce and the US market.

For the 28 weeks ended 15 August, pre-tax profit increased 14.6% to GBP17.8m (US$27m), up from GBP15.6m a year earlier.

Composite gross margin, however, fell to 57.6% from 58.5%, partly a result of a change in sales mix between wholesale and retail sales, in addition to a drop in wholesale margin arising from a higher proportion of sales to licensed stores. Retail gross margin was flat at 64%, despite an increase in outlet sales as a proportion of total sales.

Group revenue climbed 24.5% to GBP226.8m from GBP182.2m in the prior year period. In particular, e-commerce sales grew 63.6% to GBP22.9m, boosted by contributions from the group's Canadian website launched last November, and from the Australian website launched in June.

Retail sales, including e-commerce, were up 20.1% to GBP168.2m.

Ted Baker's sales in the UK and Europe grew 14.7% to GBP120.9m, while North American retail sales were up 37.4% to GBP39.7m. Asia sales grew 31% to GBP7.6m, despite the challenging trading environment in China and Hong Kong.

The fashion retailer is in the early stages of investment in Asia and said it remains “positive” about the long term opportunities to develop the brand in this territory. During the period, it opened its first street-level store in Hong Kong, its first outlet in South Korea, and a concession in China.

Chief executive Ray Kelvin, said: “This strong performance across all channels and territories is testament to the growing strength of Ted Baker as a leading global lifestyle brand.”

Looking ahead, the company said it continues to perform well and remains focused on the long term development of the Ted Baker brand.

“We continue to invest in infrastructure and people to support the future growth of our business in new and existing markets. Whilst we have made a strong start to the financial year, our results for the full year will, as always, be dependent on the more weighted second half trading period.”

The company will report its next interim management statement, covering the period since the start of the second half of the financial year, in mid-November.

Anusha Couttigane, senior fashion consultant at retail analyst Conlumino, notes that Ted Baker is taking "an extremely adaptable" approach to international expansion.

"In some ways, this draws out the preparation time required for expansion, as it mean establishing international branches of the business that operate largely independently of one another. Yet by resisting a “one size fits all” policy, Ted Baker is able to make cautious moves into new geographies by taking calculated risks, which ensure teething problems in emergent markets do not compromise the profitability of the wider business."