TIDMTED
RNS Number : 2879W
Ted Baker PLC
10 December 2019
10 December 2019
Ted Baker Plc
("Ted Baker" or the "Group")
FULL YEAR OUTLOOK & TRADING UPDATE
The Board of Ted Baker plc provides the following update on
trading and outlook.
FULL YEAR OUTLOOK
Expectations for the period ending 25(th) January 2020 have been
reduced to a minimum profit before tax of GBP5m, with a potential
outcome of up to GBP10m dependent on Christmas trading and final
year-end review.
The Board has considered:
-- Trading over November and the Black Friday period was below
expectations, with lower than anticipated margins and sell
through.
-- An anticipation that difficult trading conditions will
continue, and therefore it is appropriate to take a more cautious
outlook for the remainder of the financial year, which includes the
key trading months of December 2019 and January 2020.
-- Non-trading Foreign Exchange movements relating to the
translation of intercompany balances will in future be reported as
a non-underlying item.
The last 12 months has undoubtedly been the most challenging in
our history, yet the Ted Baker brand remains well supported by our
customers, partners and trustees and we appreciate their ongoing
support.
We are taking the necessary immediate actions to address
underperformance and improve efficiencies across the wider Group
and are confident that these will return the Group to a stronger
position and continue the Brand's long-term development.
IMMEDIATE ACTIONS
The Board has instigated an immediate action plan to improve the
performance of the Group:
1. COST REVIEW: independent consultants Alix Partners have been
engaged to conduct a wide-ranging review of the Group's operational
efficiency, costs and our business model.
2. ASSET REVIEW: a review of the Group's assets commenced in
October and is progressing to the expected timetable.
3. DIVIDEND SUSPENDED: While the immediate actions are being
implemented the Board has determined that dividend payments will be
temporarily suspended. The Board recognises that dividend is an
important part of our returns to shareholders and will look to
resume payment as soon as it is appropriate to do so.
The Board will include progress updates on the Immediate Actions
that are being implemented within its Full Year & Interim
Reporting schedule.
TRADING UPDATE (for the 17 week period from 11 August 2019 to 7
December 2019)
Reported Organic(1)
--------------------------------
Change Constant Change Constant
17 weeks to currency(2) currency(2)
7 December change change
2019
--------------- ------- ------------- ------- -------------
Group revenue GBP203.8m (0.3%) (1.2%) (3.1%) (3.9%)
--------------- ------- ------------- ------- -------------
Retail GBP143.0m (5.7%) (6.4%) (4.8%) (5.5%)
--------------- ------- ------------- ------- -------------
Wholesale GBP60.8m 15.1% 13.7% 1.9% 0.6%
--------------- ------- ------------- ------- -------------
-- Group revenue decreased 0.3% (1.2% decrease in constant
currency) to GBP203.8m for the 17 week period from 11 August 2019
to 7 December 2019 (the "Period"). Removing the impact of
acquisitions and disposals ("organic basis"), Group revenue
declined 3.1% (3.9% in constant currency). We have continued to
experience challenging trading conditions in the UK as a result of
weak consumer spending, macro-economic uncertainty and a backdrop
of elevated promotional activity.
-- On an organic basis, total retail sales decreased 4.8% for
the Period (5.5% decrease in constant currency) and average square
footage rose by 5.2% to 424,916 sq.ft (2019: 403,888 sq.ft).
September sales were adversely affected by unusually warm weather
in the UK and Europe.
-- E-commerce sales decreased 0.7% (1.4% in constant currency)
and represented 31.0% of total retail sales (2019: 29.4%). Whilst
our UK and Europe performance has been impacted by the pressures
detailed above, we have seen a strong performance in North America,
with Ted Baker own site sales increasing 28.9% in constant
currency, which reflects good progress against an important pillar
of Ted Baker's international growth strategy.
-- On an organic basis, wholesale sales increased 1.9% (0.6% in
constant currency). As previously noted, the increase is due to the
implementation of our new monthly product drops, with sales which
would have previously fallen in the first half of the year now
falling within the current reporting period. We anticipate a
decline in organic wholesale sales in the mid to high single-digit
range (in constant currency) for the full year, reflecting the
challenging trading conditions impacting both our UK and North
America trustees as well as our territorial licence partners across
the world.
-- Group gross margin is below expectations due to an increase
in promotional activity, following the unprecedented and sustained
levels of promotional activity across the sector, and taking a more
proactive approach to stock management and inventory sell
through.
Operating Update:
-- Senior management team appointments:
o Rachel Osborne as Chief Financial Officer in November
2019;
o Ari Hoffman as Chief Executive Officer of North America in
December 2019;
o Peter Collyer as Chief People Officer joining in January
2020.
-- Creation of a joint venture in Mainland China, Hong Kong and
Macau, with our first store opening (Yansha Outlet, Beijing) in
November. Agreement with Sojitz Infinity Inc. completed in October,
creating an exclusive retail licence for Japan, initially for five
years. This completed the reorganisation of our Asian operations
and is another step forward in our strategy to further expand Ted
Baker as a truly global lifestyle brand.
-- New product licence agreement with Next Plc signed in August
to accelerate the expansion of Ted Baker's childrenswear
collections.
-- Opened three short term leases in the UK at Stratford,
Lakeside and Cardiff, all with encouraging starts.
Board Changes
The company has made separate announcements regarding immediate
Board changes.
This announcement contains inside information. The person
responsible for arranging the release of this announcement on
behalf of the Company is Peter Hearsey-Zoubie, General Counsel
& Company Secretary.
(1) The Period benefitted from incremental footwear revenue,
following the acquisition of No Ordinary Shoes Limited and No
Ordinary Shoes USA LLC, which completed on 1 January 2019. This
revenue would have previously fallen within licence income. On 1st
October 2019 we commenced trading as a joint venture in Mainland
China, Hong Kong and Macau with LongGoal and begun operating under
a retail licence model in Japan with Sojitz Infinity Inc. Organic
growth rates represents year on year performance excluding the
impact of acquisitions or disposals.
(2) Constant currency comparatives are obtained by applying the
exchange rates that were applicable for the 17 weeks ended 8
December 2018 to the financial results in overseas subsidiaries for
the 17 weeks ended 7 December 2019 to remove the impact of exchange
rate fluctuations.
Hudson Sandler Tel: +44 (0) 20
7796 4133
Alex Brennan / Hattie Dreyfus / Nick Moore
Enquiries and further information:
www.tedbaker.com
www.tedbakerplc.com
Media images available for download at:
www.tedbakerplc.com/ted/en/mediacentre/imagelibrary
Cautionary statement regarding forward-looking statements
This announcement contains certain forward-looking statements.
These forward-looking statements include matters that are not
historical facts or are statements regarding the Group's
intentions, beliefs or current expectations concerning, among other
things, the Group's results of operations, financial condition,
liquidity, prospects, growth, strategies, and the industries in
which the Group operates.
Forward-looking statements are based on the information
available to the Directors at the time of preparation of this
announcement, and will not be updated. The Directors can give no
assurance that these expectations will prove to have been correct.
Due to inherent uncertainties, including both economic and business
risk factors underlying such forward looking information, actual
results may differ materially from those expressed or implied by
these forward-looking statements.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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