It may be nuclear winter on the UK high street but some chains are still frolicking in the sunlit uplands. Ted Baker said today that revenue rose 11.3% (yes, you read that right) in the 19 weeks to June 11 with retail sales up 12.7% (or 10.3% when currency exchange volatility is factored-out). Wow.
OK, some of that was from new stores. You increase your trading space by 9.7% and you expect to sell more don’t you? Maybe. That’s how it should work but it doesn’t always and new stores can cannibalise old ones for a while (just look at Primark in Germany and the Netherlands).
What’s key here is that sales growth outstripped squad footage growth and there appears to have been no cannibalisation whatsoever.
In a model of understatement, the company said the “good performance was achieved in the context of challenging external trading conditions, and is a reflection of the strength of the brand and the group’s business model.”
Importantly, international expansion continued with successful store openings in Beijing, Ottawa and Seattle, and further concession openings in premium department stores in China, France, Germany, Japan and Spain.
And just as important (if not more so), the e-commerce business continued to perform well with sales up a storming 32.3%. During the period, Ted Baker launched its first language-specific website in Germany and it said it’s been “very pleased with its performance at this early stage.”
Wholesale turnover for the period increased by 7.3% (or 5.6% currency-neutral). The North American wholesale business enjoyed a strong start to the season and continues to perform well. But the performance of the UK wholesale business was impacted by the timing of some deliveries, although the firm continues to anticipate achieving low double-digit-growth in the wholesale business for the full year.