The clothier has signed a new licencing agreement with Bedeck to expand the global reach of Ted Baker with bedding and towels from January 2022.
In the short term, stores are expected to remain closed for another few months, followed by a phased recovery, while Brexit will cost an extra £5mln due to extra duty and shipping costs, partially offset by a new customs warehouse capability.
The fashion designer will also launch a new online platform at the end of the first quarter with improved functionality and flexibility, while it plans to save £31mln across the group and £3mln in rent after cost-cutting measures.
In the 13 weeks to January 30, revenue tumbled 47% due to store closures and low footfall in those allowed to trade, alongside a decline in outerwear and occasionwear demand during the Christmas period.
Retail sales were down 47%, wholesale and licence revenue decreased 44% and e-commerce dipped 1%.
The China, Hong Kong and Macau joint venture continued to see growth, with sales up 14% overall and up 33% on mainland China.
At the end of the fourth quarter, net available liquidity was £200mln comprising £67mln of cash and £133mln of bank facilities.
Analysts at Hargreaves Lansdown noted that Ted Baker “is facing the perfect storm” because its brand is synonymous with wedding-guest, occasion and workwear, while it doesn’t have much presence in out-of-town retail parks, which is where footfall has shifted in areas were shops are allowed to open.
“Ted Baker wasn’t in the greatest position before the crisis, meaning coronavirus has simply added weight to already tired shoulders. A loose handle on stock management and a disappointing online business meant profits were already feeling the effects of falling high-street footfall. The latter is particularly worrying as the pandemic has accelerated the shift to digital shopping,” said analyst Sophie Lund-Yates.
“The group has pulled its socks up, with the balance sheet now in a better position. The group will want to avoid coming back cap-in-hand to investors to shore up its finances once more. But if conditions improve at a slower rate than expected, this can’t be ruled out – internal cost saving efforts can only go on for so long.”
Shares slipped 7% to 97.25p on Thursday morning.