Ted Baker PLC updates
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Ted Baker’s facelift is progressing. The UK fashion chain will move out of its old headquarters, known as “The Ugly Brown Building” into premises billed as “gorgeous”. Chief executive Rachel Osborne is rebuilding a business brought to its knees.
Coronavirus arrived shortly after an accounting scandal and the departure of founder Ray Kelvin due to misconduct allegations. The run of bad luck has continued with a post-Covid recovery in which formal clothing is out of fashion. Retail sales in the quarter to August remained almost one-third below 2019 levels, Ted Baker said on Tuesday.
British workers are only now returning en masse to offices following an 18-month hiatus. Relaxed work-from-home dress codes are accompanying them. Ted Baker’s trademark style has been smart fashion with a twist. The contrast with UK stock market peer and casual fashion specialist Superdry is glaring.
Julian Dunkerton regained control of the fashion group he founded just before the pandemic struck. Superdry has refreshed its look, ditching the kanji that once adorned its clothing. Sales this financial year of £692m are within a hair’s breadth of pre-pandemic levels, according to analysts’ consensus. Ted Baker sales are not expected to recover that lost ground for another year.
Profitability at the two groups is expected to follow the same pattern. The shares reflect this. Superdry is up 150 per cent over the past year, Ted Baker stock has risen by just half.
The business is in no danger of running out of cash. This stands at £16m thanks to a share offering last year and funds from the sale of The Ugly Brown Building. Bank facilities of £90m provide a further buffer. The company says its clothing lines will become multifunctional and comfort-orientated. The important Christmas sales period will test that premise.
Osborne has overseen a successful managerial and financial overhaul. To keep the turnround rolling, Osborne has to succeed in a mission that is much harder to systematise or predict: reposition the brand with a clothing range customers rush to buy.
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