TIDMTED
RNS Number : 9272M
Ted Baker PLC
26 May 2022
26 May 2022
Ted Baker Plc ("Ted Baker", the "Group")
Preliminary Results Announcement for the 52 weeks ended 29
January 2022 and Q1 trading update for the 12 weeks ending 22 April
2022
Ted demonstrating good sales momentum, improving gross margin
and operating cost leverage
Rachel Osborne, Chief Executive Officer, commented:
"We continue to make good progress against our Transformation
Plan, helping us deliver strong sales momentum through the year as
we focus on driving Ted Baker's growth as a global lifestyle
brand.
That momentum has continued into the new year, supported by a
steady return to the office and social events. While we remain
mindful of what is a challenging macro environment, we are well
positioned for growth. The positive response to our SS22 collection
and the recent launch of our new digital platform, supported by our
strong brand, capital light strategy and well-established
distribution channels give us confidence in Ted Baker's
future."
52 weeks 53 weeks Change
ended ended
29 January 30 January
2022 2021 (restated)
Group Revenue GBP428.2m GBP355.3m +20.5%
constant currency +23.2%
Underlying (Loss)/Profit Before Tax(2) GBP(38.4)m GBP(59.2)m +35.1%
(Loss)/Profit Before Tax GBP(44.1)m GBP(107.7)m +59.1%
Basic EPS (19.3)p (56.2)p +65.7%
Underlying(2) EPS (16.4)p (26.0)p +36.9%
Dividend(3) nil nil n/a
Notes: (1) Restated to reclassify delivery income from cost of
goods sold to revenue and certain fulfilment costs from cost of
goods to operating expenses. Details of the restatement are
included in the annual report and accounts
(2) Before non-underlying items
(3) Declared and paid
Ted Baker Plc, the global lifestyle brand, today reported
preliminary results for the 52 weeks ended 29 January 2022 and a
trading update for Q1, covering the 12 weeks to 22 April 2022.
Full Year Highlights
1. Accelerating sales growth, with sequential improvements during the year
-- Group Brand sales of GBP918m up 23% compared to FY21
-- Group sales growth of 21% compared to FY21, up 23% in constant currency
2. Brand strength supporting improving gross margin
-- Brand metrics remained strong in the UK, improving in US and Germany
-- Full price sales mix +810 bps for FY and gross margin +105 bps for FY
3. Improvement in underlying profitability
-- GBP21m reduction in underlying pre-tax loss year-on-year
-- Significant improvement in opex to sales ratio of 700 bps for
FY, with cost discipline maintained and positive leverage from
transformation programme cost savings
4. Net cash position and strong liquidity
-- Net cash of GBP3m at year-end 29 January 2022
-- Strong liquidity with bank facilities of GBP80m in place at balance sheet date
5. Acceleration of capital light growth
-- Online concession performance robust, product well received
-- Strong performance of licence channel, up 22% vs last year
-- New UK franchise agreement, with potential for up to 30 new stores in untapped catchments
6. Continued progress on ESG targets
-- Strong improvement in sustainable material use across our
collections, at 26% compared to 17% last year
-- Science Based Target Initiative submission made. Awaiting accreditation
The below table provides Q1 trading update, for 12 weeks to 22
April 2022.
Q1 2023 vs Q1 Q1 2023 vs Q1
2022 2020
Group 20% -37%
-------------- --------------
Retail 28% -32%
-------------- --------------
Stores 137% -37%
-------------- --------------
eCommerce -36% -20%
-------------- --------------
Wholesale 2% -49%
-------------- --------------
Licence 40% -2%
-------------- --------------
Q1 Highlights
1. Continued positive momentum for Q1
-- Q1 sales growth of 20% compared to last year
-- Return to office, weddings and travel provide positive tailwinds for the brand
-- Mindful of consumer squeeze from inflation and cost of living pressures
2. Ongoing progress in full price sales mix
-- Full price sales mix +1500 bps for Q1, but still below pre-pandemic levels
-- Q1 trading margin improved +360 bps vs last year
3. New digital platform delivering enhanced consumer experience
-- Launch of new digital platform, with improved user experience
delivering conversion rate improvement since launch
-- Anticipated disruption from re-platforming adversely affecting eCommerce sales during H1
4. Encouraging response to new SS22 collections
-- WW strength from AW21 continued into SS22, with good sales for WW dress, bags, and footwear
-- Improved performance in MW shirting, knitwear and jersey
5. Cashflow discipline maintained
-- Net debt of GBP17m at 22 April 2022, reflecting normal
working capital cycle and in line with expectations
6. Progress continuing post Q1 in UK and EU, more challenging in North America
-- Encouraging start to Q2, with improvement in sales trends for
both stores and eCommerce vs Q1 for UK and EU
-- North America Retail adversely impacted by availability and eCommerce platform disruption
The Group will today host its results presentation for analysts
and investors at 10am at Panmure Gordon, 1 New Change, London, EC4M
9AF. This will be streamed online at:
https://stream.brrmedia.co.uk/broadcast/6272bfd8860d1117d3863589
A dial-in facility will also be available . Participant details
are:
-- Phone Number: +44 (0)330 165 4012
-- Confirmation Code: 8323173
For more information on attending please contact TedBaker@tulchangroup.com .
Enquiries:
Ted Baker plc
Rachel Osborne, Chief Executive Officer
Marc Dench, Chief Financial Officer
Phil Clark, Investor Relations
Tulchan Communications
Jonathan Sibun/Jessica Reid
Media images available for download at:
Tel: +44 (0) 20 7255 4800
Tel: +44 (0) 20 7353 4200
Tel: +44 (0) 20 7353 4200
http://www.tedbakerplc.com/ted/en/mediacentre/imagelibrary
Notes to Editors
Ted Baker plc - "No Ordinary Designer Label"
Ted Baker is a global lifestyle brand distributing across five
continents through its three main distribution channels: retail
(including eCommerce); wholesale; and licensing.
Ted Baker has 377 stores and concessions worldwide, comprising
97 in the UK, 81 in Europe, 95 in North America, 95 in the Middle
East, Africa and Asia, and 9 in Australasia.
We offer a wide range of collections including Menswear;
Womenswear; Accessories; Bedding; Childrenswear; Eyewear; Footwear;
Fragrance and Skinwear; Gifting and Stationery; Jewellery;
Lingerie, Underwear and Sleepwear; Luggage; Neckwear; Rugs;
Suiting; Technical Accessories; Towels; Wallcoverings; and
Watches.
Formal Sale Process
On 18 March 2022, Sycamore Partners Management LP announced that
it was considering a possible offer for the Company. While we
received offers from Sycamore and other unsolicited third-party bid
interest in relation to the Company, the Board did not consider
that the offers received reflected appropriate value for the
Company's stakeholders. In view of the interest expressed by
potential offerors, and having consulted its major shareholders,
the Board decided to conduct an orderly process to establish
whether there is a bidder prepared to offer a value that the Board
considers attractive relative to the standalone prospects of Ted
Baker as a listed company. Accordingly, on 4 April 2022 we
announced that we would be conducting a formal sale process. On 23
May 2022, we announced we were proceeding with a preferred
counterparty.
Strategic Review
We have done much of the heavy lifting needed to move the
business forward. We have fixed the foundations, brought costs
under control and embedded financial disciplines throughout the
business. During the year, we refreshed our strategy to focus on
our key areas for growth.
The strategy continues the focus on our core priorities. We have
made solid progress on all the pillars in the context of external
challenges including the ongoing pandemic, customer spending and
behaviours, while managing availability of product and maintaining
a resilient supply chain.
With the lifting of restrictions starting at the end of January
2022, we continue to be optimistic about what we can achieve with
Ted Baker as the world opens up. As the situation evolves, people
are returning to the workplace, and weddings and social gatherings
have resumed. As this happens, our customer insight adds to our
confidence that people will seek out Ted Baker's unique mix of
occasionwear and formalwear, along with our new products,
supporting our return to growth and profit.
Customers
Like any lifestyle brand, our customers are at the heart of
everything we do. Understanding them is the key to building our
business and over the year we have worked hard to attract and
retain more of our target customers.
To do this, we invested in a new research programme that has
deepened our understanding of different customer segments, their
lifestyles, tastes, attitudes and interests. The ongoing programme
continues to deepen our knowledge, so we can be more effective in
appealing to them as we design targeted new products and
ranges.
The depth of this work and the insights are making a real
difference across the whole process, from product creation to
marketing reach and effectiveness.
Retail Sales
Retail sales were disrupted by the lockdowns and restrictions
over the year, but sales increased by 17.2%, with digital sales
delivering 44.3% of the total (2021: 57.5%). Overall, digital sales
demand stayed above historical levels, up 12.7% on a two-year
basis, but sales fell below the levels we saw during the first
lockdown as we reviewed our promotional approach in line with stock
and liquidity levels. Our digital sales performance has been strong
in the concession environment, with partners like John Lewis and
Next performing well.
The pick-up in occasionwear in the latter half of the year in
both our men's and women's collections, along with formalwear and
suits, was an encouraging sign that people are ready to get back to
some normality. From a product point of view, we saw good
performance across womenswear accessories and footwear. However,
our menswear did not perform as well as expected, particularly
outerwear, where some of our styling did not resonate as well with
our core customers as we had hoped.
These positive customer signals allowed us to move back to our
full-price stance and reduce discounting, with very encouraging
progress - full price sales mix increased by +810 bps over the
year.
Where consumer confidence was recovering in the first half of
the year, we saw significantly improved sales across our North
American concessions and North American and UK shopping malls. This
was also reflected in the return of footfall in the first part of
Q4; although this didn't hit pre-pandemic levels, we did see an
uplift, with many more customers coming out and shopping. We saw
strong results for the six weeks of trading from the start of
November. The introduction of Omicron warnings and restrictions in
early to mid-December saw footfall drop away - first in Europe and
then in the UK and US. With the mood changing with the lifting of
restrictions in the UK in late January, and with more optimism
about the shift in mindset, we hope to see a similar return to
recovery of footfall.
Product licensing
Product licensing is a core part of our brand strategy for Ted
Baker. It allows us to extend our brand reach across a broader
range of clothing, accessories and homewares. We do this by working
with carefully selected partners who bring unique supply chain
experience and/or retail distribution.
Income from licenses and royalties accounted for 3.5% of revenue
in the year but represented 31.0% of brand sales (retail sales to
end customer).
Our product licence partners work under our brand guidelines and
creative direction. Our partnerships sit within three defined
areas:
- Specialist clothing categories: including childrenswear,
suiting, lingerie and nightwear, men's underwear, fragrance and
skincare
- Lifestyle accessories: including eyewear, watches, luggage,
jewellery and personal technology accessories
- Home: including bedding, towels, wallpaper and rugs
- Beauty: including fragrance and toiletries.
Income from licences increased by 21.7% to GBP15.2 million
(2021: GBP12.4 million), with strong growth in eyewear in North
America and the UK, as well as another good performance from
childrenswear and lingerie in partnership with Next. Formalwear
sales remained subdued, particularly in the first half of the year,
as people continued working from home and with the reduction in the
number of weddings and other formal occasions taking place.
Our strategy
As we move into our new financial year, our focus is on core
value creation in three key areas: brand, product and customer.
Brand
The strength of the Ted Baker brand is at the heart of our
success. Built over 30 years, Ted Baker is renowned for offering
excellent design, quality and value. Put simply, customers love the
brand, and this shows up consistently across all our distribution
channels, whether physical or digital.
The brand remains in robust health, with strong scores in our
core brand metrics - in unprompted and prompted awareness,
affinity, perception and quality, adding up to a healthy net
promoter score (NPS) despite the pandemic slowing the opportunities
for customers to see and try product in store. We will continue to
work on our distinctive brand expression to create consistency
across all channels.
Prompted Awareness Consideration NPS
UK 95% 54% 43%
------------------- -------------- ----
USA 63% 33% 59%
------------------- -------------- ----
Germany 48% 21% 36%
------------------- -------------- ----
Source: Truth
Product
We will continue to use what we've learnt about our customers to
evolve our range of products and make them more and more relevant
to people and their lives. The last two years saw the arrival of
lots of new design talent across the business - in men's and
women's clothing, footwear and accessories, and the team has come
together well under our Creative Director Anthony Cuthbertson. They
have been designing against the new product pyramid we introduced
last year and customers have responded well, with encouraging sales
in womenswear. In menswear, some of the new footwear and
accessories in our core collection have performed well. Lessons
from our A/W 21 collection are being applied to future
collections.
Changes in people's buying habits are a constant challenge to
brands in our sector. We are not immune to this and during the
pandemic, we have had to find a balance between following trends
and retaining the essence of what makes Ted Baker clothing and
accessories so loved by our customers. The lessons we have learned
from the team's first collections, along with our deeper
understanding of our customers' lifestyles and motivations, are now
being applied to fine tune the new collections in development.
Capital-light growth
Over the last year, we have used short-term leases to take
advantage of changing footfall patterns and test the viability of
stores in new locations such as Bromley, Leicester and Exeter.
Bringing physical and digital together is the art of a strong
omnichannel and customer-centric brand approach. We're using this
strategy to grow Ted Baker in new and traditional markets.
At the end of the financial year, we signed an agreement with
Robert Goddard, a well-established franchise partner in the UK. The
agreement will see them create new standalone Ted Baker stores in a
wholesale franchise relationship that will increase the reach of
our brand while requiring minimal investment from us.
Digital
We launched our new digital platform in March 2022, moving to a
modern 'fit for the future' architecture that is the foundation for
further development of our integrated digital retail proposition.
The new global digital platform will enhance the customer
experience with cleaner design, AI-driven search word suggestions
and 'lazy loading' to encourage scrolling, amongst other changes,
which should ultimately lead to increased conversion, digital
marketing efficiency and higher digital sales.
Priority global markets
As the world moves out of pandemic mindset and we bring our
learnings from our customer insight project to bear, there are
plenty of opportunities for growth. We plan to focus on our biggest
and most important markets in the coming year. So we will continue
to re-establish and build Ted Baker's position in the UK, while
also focusing on the US, Germany, China, and the Middle East.
Our ESG approach - 'Fashioning a Better Future'
The scope of our ESG work is broad - from improving supply chain
transparency to ensuring fair, ethical and sustainable practices
are in place to creating ranges with more sustainable cotton,
leather and wool. We relaunched our eCommerce packaging and retail
bags - and these are now FSC-certified and 100% recyclable. We are
aiming to have 100% sustainable customer packaging by 2025, with
all paper-based packaging being made from recycled materials.
It is vital that we share all this progress on sustainability
with our customers, so in November we introduced sustainability
swing tickets on our products in stores. These show where products
are made and what they are made from. We also added a QR code to
our packaging and swing tickets to give customers clear details of
the materials that go into each product.
Last year, we said we would set ambitious carbon targets to
achieve net zero by 2030, and this year we submitted our carbon
reduction targets for accreditation by the SBTi (Science Based
Targets initiative). We also brought together a Ted Baker carbon
steering group who are looking at how we will hit our 2030 targets.
And we continue to work collaboratively with other brands in the
BRC Climate Action and Textiles 2030 working groups.
From ugly to gorgeous
Despite the challenges of the last year and the potential
challenges ahead, we go into this financial year with our sense of
optimism about the future of Ted Baker stronger than ever.
We are looking forward to moving to our new London HQ later in
the year. Leaving behind the Ugly Brown Building in St Pancras
(which has been our home for the last 22 years), we will bring
everyone together in the Gorgeous Brown Building in Fitzrovia,
London. Across the Atlantic, our new North American head office in
New York has brought together the whole US team in one place for
the first time.
Both spaces represent the spirit of moving forward together in
fresh environments inspired by our refreshed brand. They will allow
us to continue to build a culture that the Ted Baker brand, and our
people, richly deserve.
The hard work and dedication of our team at every level has
helped us make great strides forward this year. I would like to
thank everyone for their efforts and positive attitude, and I look
forward to working with them in the coming year.
A tribute to John Barton
1944-1921
Ted Baker Chair, July 2020 - December 2021
John joined the Ted Baker Board as its Chair in July 2020. He
brought with him a wealth of experience, having held senior
non-executive positions in leading consumer-facing companies,
including stints as Chair of easyJet, Next and Cable &
Wireless.
He was a real find for Ted Baker and his broad experience,
insight and dry sense of humour made a huge difference to the
business in his time with us. It is no exaggeration to say that
everyone who met him loved him; we all feel very fortunate to have
had the opportunity to work with him and learn from him.
John relished the challenges Ted Baker faced and nothing could
put him off his stride. His calm approach was rooted in deep
integrity and humility, which set the tone for the Board and his
interactions with everyone he met at every level of the business.
Hugely encouraging and supportive of the Executive Team, he was
generous with both his time and knowledge, building close
relationships with CEO Rachel Osborne and the Executive Team as
they navigated the trials of implementing a turnaround plan during
a global pandemic.
We will miss John's wisdom, support and guidance, as well as the
twinkle in his eye. Our deepest sympathies go to his wife, Anne,
and their family.
In summary
We are confident that our resilient and distinctive brand has
real resonance with our core customers. While we are our optimistic
about the brand and business, we are mindful of the potential for
inflation and the rising cost of living to create more instability,
as well as the varying speeds of recovery from the pandemic in
different regions.
We were shocked by the invasion of Ukraine and the devastating
scenes that we've seen on our TV screens over recent weeks. To
support the people of Ukraine we sent a shipment of clothing to the
Polish/Ukrainian border and made an initial donation of GBP25,000
to the Red Cross. Many of our staff have also kindly given their
time and support, and we enabled them to take additional
volunteering days to make this possible. As a business, we
immediately stopped wholesale shipments to Russia, which, combined
with our sales in Ukraine and Belarus, have historically been less
than GBP1 million of annual sales. We will continue to explore
meaningful ways that Ted Baker can support the people of Ukraine
effectively.
As the new year progresses, we will remain vigilant on cost
controls and we will continue to work closely with our suppliers
and partners to keep Ted Baker efficient and competitive.
Financial Summary
This year has seen a robust performance by the Group, with a
significant increase in revenues and gross margin, and narrowing
losses with encouraging momentum through the year. All this has
been achieved despite the ongoing challenges and disruption caused
by Covid that continued to impact store openings and footfall. The
pandemic also continued to hold back demand for our formal and
occasionwear ranges.
Global Group Summary
52 weeks 53 weeks Variance Constant
ended 29 ended currency
January 30 January variance(1)
2022 2021 (restated)(2)
Group
----------- -------------------- ---------- -------------
Revenue GBP428.2m GBP355.3m 20.5% 23.2%
----------- -------------------- ---------- -------------
Gross margin (excluding non-underlying
items) 55.2% 54.1% 105 bps
----------- -------------------- ---------- -------------
Loss before tax (excluding GBP(38.4)m GBP(59.2)m +GBP20.8m
non-underlying items)
----------- -------------------- ---------- -------------
Loss before tax GBP(44.1)m GBP(107.7)m +GBP63.7m
----------- -------------------- ---------- -------------
Loss before tax as a % of
revenue (10.3%) (30.3%) 2,000 bps
----------- -------------------- ---------- -------------
Retail
----------- -------------------- ---------- -------------
Retail revenue GBP301.9m GBP257.5m 17.2% 20.0%
----------- -------------------- ---------- -------------
Store revenue GBP168.1m GBP109.3m 53.7% 58.1%
----------- -------------------- ---------- -------------
Ecommerce revenue GBP133.8m GBP148.2m (9.7)% (8.1)%
----------- -------------------- ---------- -------------
Gross margin (excluding non-underlying
items) 59.9% 56.7% 310 bps
----------- -------------------- ---------- -------------
Average square footage* 363,202 421,435 (13.8%)
----------- -------------------- ---------- -------------
Closing square footage* 344,502 411,602 (16.3%)
----------- -------------------- ---------- -------------
Sales per square foot excluding
eCommerce GBP463 GBP259 78.4% 83.4%
----------- -------------------- ---------- -------------
Wholesale
----------- -------------------- ---------- -------------
Revenue GBP111.2m GBP85.3m 30.4% 33.0%
----------- -------------------- ---------- -------------
Gross margin 36.4% 39.6% (320) bps
----------- -------------------- ---------- -------------
Licensing
----------- -------------------- ---------- -------------
Revenue GBP15.2m GBP12.4m 21.7% 21.7%
----------- -------------------- ---------- -------------
*Excludes licence partner (franchisee) stores. Sales per square
foot is based on average square footage
(1) Constant currency compares the performance in local currency
at the same exchange rate for both periods, thereby removing the
impact of exchange rate fluctuations between periods.
(2) Prior year revenue, gross margin and distribution costs are
adjusted to reflect the reclassification of delivery income from
cost of goods sold to revenue and certain elements of delivery cost
from cost of goods sold to distribution expenses. The prior year is
reported on a consistent basis to FY22.
Channel Performance
Ted Baker's total brand sales increased to GBP918 million in the
year (2021: GBP745m) with an improved performance seen across all
of our channels and markets. Brand sales represents management's
estimate of the end retail sales value to the consumer, including
its own retail channels and those of its wholesale trustees, joint
venture partners, territorial licences (franchisees) and product
licencing sales.
Retail
Our retail channel comprises physical stores, concessions and
eCommerce. We operate stores and concessions across the UK, Europe,
North America and South Africa, with localised eCommerce sites in
the UK, Europe, North America and Australia. Our stores play an
important role supporting digital sales: driving brand awareness,
showcasing our products, and giving customers a seamless experience
for click and collect and order-in-store. Our stores also provide a
fulfil-from-store service, which makes our store stock available to
customers shopping online.
Covid disruption continued to affect the performance of our
retail channel through the year. Most of our stores in the UK,
Europe and Canada were closed for extended periods at the start of
the financial year to comply with local lockdowns. As stores
reopened during the first half of the year, footfall remained well
short of pre-pandemic levels but recovered as the year progressed.
The success of vaccine rollouts and the reduced prevalence of the
virus in many of our territories saw customers beginning to return
to the workplace and shops. We saw accelerating momentum in stores
through November and the first weeks of December, with some of our
locations trading close to - or even above - pre-pandemic levels.
The emergence of the Omicron variant in mid-December reversed this
positive momentum. This coincided with the key trading period in
the run up to Christmas, with restrictions and work from home
guidance reintroduced across much of Europe and the UK.
We continued to make good progress on our store portfolio
optimisation programme in line with our capital-light growth
strategy. We closed a further 15 locations and opened seven stores
during the period (excluding partner locations), while continuing
to renegotiate improved lease terms. We transitioned our business
with House of Fraser from a concession to a wholesale model - these
sales are now reported within our wholesale channel from the second
half of the year.
ECommerce revenue decreased 9.7% (-8.1% in constant currency)(1)
in the year against a strong comparable period that saw growth of
24.8%. Sales in the prior period benefitted from store channels
being closed, due to Covid restrictions, for a larger proportion of
the period, and a higher level of promotion and markdown sales
given the elevated stock levels due to the store closures.
eCommerce sales in the current year delivered a significantly
improved gross margin with a better full-price sales mix. On a
two-year basis eCommerce revenue was up by 12.7%.
Wholesale
Our wholesale business serves trade customers ('trustees')
across the world. These are located primarily in the UK, Europe,
and North America; we also supply products to our territorial
license partners (franchisees) and joint venture partners in China
and Australia.
Many of our wholesale customers experienced the same Covid
disruption as our own retail channels, and as such, demand remained
below pre-pandemic levels.
In the UK and Europe, sales rebounded strongly against the
previous year, ending the year up 48.2%. This performance was
achieved despite ongoing disruption from Covid and distribution
challenges to trustees in Europe due to Brexit in the first half of
the year.
Demand in North America held up well, with a particularly good
performance in the first half. This reflected the effect of the
first wave of Covid in the previous year and despite adverse
weather conditions and localised lockdowns impacting several of our
wholesale partners.
Wholesale revenue overall increased by 30.4% (33.0% in constant
currency(1) ) to GBP111.2m (2021: GBP85.3m). Gross margin declined
to 36.4% (2021: 39.6%), reflecting the customer and channel sales
mix as sales demand recovered at different speeds across markets
and partners.
Licence income
Licence income represents royalty income from territory licence
partners (franchisees) and royalty income from product licences.
Our partners for territory and product licences are carefully
selected as specialists in their field. They share our passion for
unwavering attention to detail and firm commitment to quality and
who we consider will be good custodians of the Ted Baker brand.
Territory licences cover specific countries or regions primarily
in the Middle East, Asia, Europe and Central America, where our
partners operate Ted Baker branded stores under license and, in
some territories, undertake wholesale business.
Product licensing allows us to expand the Ted Baker brand across
a broader range of products relevant to our customers' lifestyles.
We do this by working with carefully selected partners that share
our passion for the Ted Baker brand and bring unique supply chain
capability and/or retail or wholesale distribution. Our product
license partnerships cover:
- Specialist clothing categories: e.g., childrenswear, suiting,
lingerie & nightwear, men's underwear
- Beauty: e.g., fragrance, toiletries and skincare
- Lifestyle accessories: e.g., eyewear, watches, luggage,
jewellery, and personal technology accessories
- Home: e.g., bedding, towels, wallpaper and rugs.
Licence income increased by 21.7% to GBP15.2m (2021: GBP12.4m).
We saw a good performance in the Eyewear segment in North America
and the UK, as well as from our partnership with Next for
childrenswear and lingerie & nightwear. Sales in the formalwear
segment remained subdued with Covid restrictions affecting return
to the workplace and with fewer events such as weddings taking
place.
Collection performance
Ted Baker womenswear sales increased by 23.3% to GBP270.9m
(2021: GBP219.7m) and represented 66.1% (2021: 64.7%) of total
sales. Ted Baker menswear sales increased by 15.8% to GBP138.7m
(2021: GBP119.8m) and represented 33.9% of total sales (2021:
35.3%).
Geographic Performance
United Kingdom and Europe
52 weeks 53 weeks Variance Constant
ended 29 ended 30 currency
January January variance(1)
2022 2021 (restated)(2)
Revenue (including licensing) GBP297.4m GBP248.7m 19.6% 20.2%
---------- -------------------- ---------- -------------
Total retail revenue GBP204.7m GBP183.9m 11.3% 12.1%
---------- -------------------- ---------- -------------
Store revenue GBP99.7m GBP67.3m 48.0% 49.7%
---------- -------------------- ---------- -------------
ECommerce revenue* GBP105.0m GBP116.6m (9.9%) (9.6%)
---------- -------------------- ---------- -------------
Average square footage** 222,816 276,437 ( 19.4 %)
---------- -------------------- ---------- -------------
Closing square footage** 203,367 269,283 ( 24.5 %)
---------- -------------------- ---------- -------------
Sales per square foot**
excluding eCommerce sales GBP447 GBP237 89.0% 85.7%
---------- -------------------- ---------- -------------
Wholesale revenue GBP77.6m GBP52.4m 48.2% 48.0%
---------- -------------------- ---------- -------------
Own stores 47 44 6.8%
---------- -------------------- ---------- -------------
Concessions*** 95 130 ( 26.9 %)
---------- -------------------- ---------- -------------
Outlets 19 21 ( 9 .5%)
---------- -------------------- ---------- -------------
Partner stores/concessions 12 10 20.0%
---------- -------------------- ---------- -------------
Total 173 205 (15.6)%
---------- -------------------- ---------- -------------
*Includes all revenue from eCommerce channels to customers
outside North America, including non-European territories.
**Excludes licence partner (franchisee) stores. Sales per square
foot based on average square footage.
***Concession numbers count multiple product locations ('mats')
within one concession partner store as a single location.
(1) Constant currency compares the performance in local currency
at the same exchange rate for both periods, thereby removing the
impact of exchange rate fluctuations between periods.
(2) Prior year revenue, gross margin and distribution costs are
adjusted to reflect the reclassification of delivery income from
cost of goods sold to revenue and certain elements of delivery cost
from cost of goods sold to distribution expenses. The prior year is
reported on a consistent basis to FY22.
The UK and major European territories were affected by lockdowns
during the first half of the year. In the UK, stores remained
closed from before the start of the year until the middle of April
2021. Stores across our European markets were closed over the same
period with a more gradual re-opening phased over the first half of
our financial year.
When stores reopened, footfall remained below pre-pandemic
levels, particularly in city centres and areas traditionally
popular with tourists. As the year progressed, workers and shoppers
started to return to city centres and trading performance improved,
with some locations outperforming their pre-pandemic levels in
November and the first few weeks of December. However, with the
emergence of the Omicron variant in the middle of December,
restrictions and/or work from home guidance were reinstated in
several of our markets. This affected consumer confidence and
stores sales over the important Christmas trading period.
At the end of the first half, we transitioned our 29 concession
locations within House of Fraser stores in the UK to a wholesale
model, with sales from these locations reported through the
wholesale channel through the second half. We closed three
unprofitable outlets in Europe and eight concessions in the UK. In
the UK, we opened one outlet store in Cannock and three new stores
on flexible short-term leases with low fit-out costs. These smaller
than typical stores have provided an opportunity to learn about
performance in different locations and for different store
configurations.
eCommerce sales declined against a strong comparative prior year
performance with sales on the Tedbaker.com website in part held
back by constraints of the legacy platform. Sales on 3(rd) party
concession partner platforms saw good growth as we increased the
number of product options available and further enhanced our ways
of working with our partners. The gross margin on eCommerce sales
improved in the year with an improved promotional stance and a
higher mix of full price sales through Tedbaker.com.
Retail sales in the UK and Europe increased by 11.3% (12.1% in
constant currency) to GBP204.7m (2021: GBP 183.9m), with eCommerce
sales representing 51.3% (2021: 63.4%) of the total. Despite the
distribution disruption caused by Brexit and the continuing effects
of the pandemic, demand from wholesale trustees and territory
licence partners recovered well, increasing our wholesale sales by
48.2% (48.0% in constant currency(1) ).
North America
52 weeks ended 53 weeks Variance Constant
29 January ended 30 currency
2022 January variance(1)
2021 (restated)(2)
Revenue GBP126.8m GBP104.1m 21.8% 29.3%
--------------- -------------------- --------- -------------
Total retail revenue GBP93.2m GBP71.3m 30.8% 38.7%
--------------- -------------------- --------- -------------
Store revenue GBP64.4m GBP39.7m 62.4% 71.7%
--------------- -------------------- --------- -------------
ECommerce revenue GBP28.8m GBP31.6m (8.9%) (2.8%)
--------------- -------------------- --------- -------------
Average square footage* 131,570 137,894 ( 4.6 %)
--------------- -------------------- --------- -------------
Closing square footage* 130,653 135,215 (3. 4 %)
--------------- -------------------- --------- -------------
Sales per square foot*
excluding eCommerce
sales GBP490 GBP288 70.2% 79.9%
--------------- -------------------- --------- -------------
Wholesale revenue GBP33.6m GBP32.8m 2.3% 9.0%
--------------- -------------------- --------- -------------
Own stores 32 35 ( 8.6 %)
--------------- -------------------- --------- -------------
Concessions** 35 35 -
--------------- -------------------- --------- -------------
Outlets 12 12 -
--------------- -------------------- --------- -------------
Partner stores/concessions 16 16 -
--------------- -------------------- --------- -------------
Total 95 98 ( 3.1 %)
--------------- -------------------- --------- -------------
*Excludes licence partner (franchisee) stores. Sales per square
foot is based on average square footage
**Concession numbers count multiple product locations ('mats')
within one concession partner store as a single location.
(1) Constant currency compares the performance in local currency
at the same exchange rate for both periods, thereby removing the
impact of exchange rate fluctuations between periods.
(2) Prior year revenue, gross margin and distribution costs are
adjusted to reflect the reclassification of delivery income from
cost of goods sold to revenue and certain elements of delivery cost
from cost of goods sold to distribution expenses. The prior year is
reported on a consistent basis to FY22.
Our North American business saw a good recovery from the
previous year's challenges. Covid-related disruption and the
resulting travel restrictions affected footfall at the start of the
year, particularly in key tourist markets such as New York, Los
Angeles, San Francisco and Las Vegas. Our stores in Canada also
remained closed under lockdown for a significant proportion of the
first half. However, consumer confidence began to return in the
spring as vaccination programmes rolled out and restrictions eased,
with the return to offices and social activities driving demand for
more formal and occasionwear.
Store sales increased by 62.4% (71.7% in constant currency)(1)
to GBP64.4m (2021: GBP39.7m), reflecting the above consumer trends.
We closed four stores in the year that were not considered
financially viable, and opened one new location in San Antonio,
Texas.
eCommerce sales reduced by 8.9% (down 2.8% in constant
currency)(1) as demand returned to physical channels. On a two-year
basis eCommerce sales grew by 30.4%. eCommerce sales represented
30.9% of total retail sales (2021: 44.3%).
The retail gross margin rate improved year-on-year, driven by an
improved full-price sales mix as we started the year with a cleaner
stock position.
Wholesale sales increased by 2.3% (9.0% in constant currency)(1)
to GBP33.6m (2021: GBP32.8m). This performance was supported by a
strong first half of the year as demand from our trustees returned
following the previous year's challenges.
We continued to deliver cost efficiencies in our North America
business, and consolidated all our North America teams into a new
office and trade show room in New York.
Rest of the World
Outside our UK, European and North America businesses, we
prioritise a 'capital-light' growth strategy with a focus on
working with partners for territory licences, joint ventures or
wholesale.
Retail
We operate owned stores in South Africa, where we opened new
locations in Johannesburg and Durban, and now operate six in the
country (2021: four stores). Total retail sales increased by 74.4%
to GBP4.1 million (2021: GBP2.3m), up 69.4% in constant currency(1)
.
Territory licences (franchisees) and joint ventures
We have joint ventures in China and Australia, and territory
licence (franchise) agreements in territories including the Middle
East, India and South Korea.
During the year our territory licence partners opened one store
in Kuwait, four in south-eastern Europe, two in India and one in
Indonesia, and closed five in Asia and one in Europe.
Our joint venture in China (including Hong Kong and Macau)
returned to growth despite consumer demand being affected ongoing
Covid disruption. Our partner opened five new stores during the
period, and closed three unprofitable locations. It now operates 22
stores and concessions across the region (2021: 20 locations).
Our Australian joint venture partner opened two new short lease
stores during the year, and now operates eleven stores in Australia
and New Zealand (2021: nine stores).
Product sales to our joint venture and territory licence
partners are reported through our wholesale channel.
Financial Review
While performance continued to be affected by the global
pandemic, the benefits of the Group's transformation programme are
now well embedded, with improved operational efficiency, robust
cost control and rigorous appraisal for capital expenditure.
Group revenue increased by 20.5% (23.2% in constant currency(1)
) to GBP428.2m (2021: GBP355.3m(2) ). Several of the Group's
stores, as well as those of our territory licence (franchisee)
partners and wholesale trustees, were closed for most of the first
quarter to comply with local lockdown restrictions. As the year
progressed and restrictions were eased in many territories, we saw
footfall and customer demand improve as well as a good response to
our refreshed Autumn/Winter '21 collection in the second half of
the year. The emergence of the Omicron variant in December, and the
reinstatement of restrictions and work from home guidance in
several markets, resulted in a significant slowdown of this trend
impacting the final six weeks of our financial year.
Year on year change in sales* (FY21-22)
Q1 Q2 Q3 Q4**
Retail (18%) 30% 15% 37%
------ ----- ---- -----
Wholesale (25%) 188% 25% 28%
------ ----- ---- -----
Licencing 7% 23% 13% 53%
------ ----- ---- -----
Group (20%) 50% 18% 35%
------ ----- ---- -----
*Sales variances calculated on sales excluding delivery income
in all quarters
**FY21 was a 53-week year - Q4 adjusted to show comparison on
12-week to 12-week basis, i.e., excluding Week 53
Two year change in sales* (FY22 vs. FY20)
Q1 Q2 Q3 Q4
Retail (46%) (30%) (28%) (29%)
------ ------ ------ ------
Wholesale (50%) (29%) (35%) (28%)
------ ------ ------ ------
Licencing (27%) (27%) (17%) (10%)
------ ------ ------ ------
Group (47%) (30%) (30%) (29%)
------ ------ ------ ------
*Sales variances calculated on sales excluding delivery income
in all quarters
Gross margin before non-underlying items improved by 105 basis
points to 55.2% (2021: 54.1%, adjusted for change in basis(2) )
reflecting the less challenging trading conditions and improvement
in our promotional stance.
We started the financial year with a less aged inventory which,
combined with the refreshed product ranges, has allowed us to adopt
a less promotional stance and begin to re-establish Ted Baker's
premium brand positioning. The gross margin rate improvement was
due to a significant improvement in the full-price sales mix, up
810 bps year-on-year, partly offset by additional duties and
unrecoverable sales tax resulting from Brexit.
Distribution costs (before non-underlying costs), which comprise
the cost of retail operations and distribution centres, increased
by 3.7% to GBP184.1m (2021: GBP177.5m, adjusted for change in
basis(2) ). Retail store operating costs increased as stores
reopened, and lower levels of furlough and government subsidies
were received relative to the prior year.
Administration expenses (before non-underlying costs) increased
by 20.8% to GBP85.8m (2021: GBP71.0m). Staff costs increased
year-on-year as no furlough or subsidies were received for head
office team members. We also continued to invest in marketing to
support the future growth of the business.
Loss before tax, and Loss before tax and non-underlying
items
The loss before tax was GBP44.1m (2021: loss of GBP107.7m), an
improvement of GBP63.7 million in the year. The loss before tax and
non-underlying items was GBP38.4m (2021: loss of GBP63.7m), an
improvement of GBP20.8 million in the year.
Non-underlying items
Non-underlying items before tax in the period amounted to GBP
5.6m (2021: GBP48.6m) and comprised the following items expenses /
(income):
52 weeks ended 53 weeks ended
GBP million 29 January 2022 30 January 2021
Loss before tax and non-underlying
items (38.4) (59.2)
----------------- -----------------
Inventory changes in estimates - (6.1)
----------------- -----------------
Onerous contract provision 1.2 (2.0)
----------------- -----------------
Included in gross profit 1.2 (8.0)
----------------- -----------------
Impairments (3.0) (45.3)
----------------- -----------------
Restructuring & refinancing costs (2.2) (11.4)
----------------- -----------------
New platform cost (SaaS) (7.8) -
----------------- -----------------
Head office exit receivable 8.0 -
----------------- -----------------
Gain on sales & leaseback of head
office - 17.5
----------------- -----------------
Other - (2.0)
----------------- -----------------
Included in operating loss (3.9) (49.2)
----------------- -----------------
Foreign exchange & other items (1.8) 0.7
----------------- -----------------
Total non-underlying items (5.6) (48.6)
----------------- -----------------
Loss before tax (44.1) (107.7)
----------------- -----------------
Finance income and expenses
Net finance expenses were GBP 8.2m (2021: GBP7.7m). The IFRS 16
interest expense for the period was GBP5.5m (2021: GBP6.8m). Net
finance expenses before non-underlying items were GBP6.4m (2021:
GBP8.3m).
The Group tax credit for the period was GBP 8.5 million (2021:
credit of GBP21.3m).
An income tax credit is recognised on losses before
non-underlying items at the forecast effective tax rate for the
year. This effective tax rate is higher than the UK tax rate due to
the revaluation of previously recognised UK deferred tax assets at
the higher UK rate of 25%. The higher UK tax rate was substantively
enacted at the balance sheet date and is effective from 1 April
2023.
The Group's future effective tax rate is expected to be broadly
in line with the UK tax rate which aligns more closely with
overseas tax rates from the point it increases to 25%.
Cash flow
Net cash flow for the period was an outflow of GBP 54.8m (2021:
inflow of GBP15.2m). This reflects an increased investment in
working capital as the Group returned to revenue growth (2021: net
working capital inflow of GBP57.7m) as well as an increase in
investment intended to support future growth, including the Group's
new digital platform.
In the prior year, the net cash inflow of GBP15.2m includes the
sale of the Group's head office in London (the Ugly Brown Building)
for net proceeds of GBP72.2m, net inflow from the issuance of new
equity of GBP97.8 million, a reduction in net working capital of
GBP57.7 million and the repayment of GBP180 million of borrowing
facilities.
Net cash outflow from operating activities was GBP23.8 million
(2021: inflow of GBP52.6m). The improvement in loss before tax for
the year was more than offset by an outflow from investment in net
working capital and expenditure in the Group's new digital
platform, the majority of which was on a cloud (or SaaS) based
solution and, in accordance with the latest accounting guidance
(IFRIC) has been expensed in the period rather than treated as an
investment and capitalised.
Net working capital, which comprises inventories, trade and
other receivables and trade and other payables, increased by
GBP37.2m to GBP82.8m (2021: GBP45.7m), reflecting the return to
growth of the business. Inventory increased by 17.3% to GBP103.1m
(2021: GBP87.8m) whilst sales increased 20.5% (23.2% in constant
currency)(1) . We continued to exercise controls on inventory
through the year.
Borrowing facilities
The Group's net cash at 29 January 2022 was GBP3.1 million,
reflecting cash balance of GBP14.5 million and borrowings of
GBP11.4 million (30 January 2021: net cash GBP66.7m). The Group has
a revolving credit facility ('RCF') of GBP80 million with a
maturity in November 2023.
On 25 May 2021 the Group announced the extension to its RCF with
its existing lending syndicate. The new agreement extended the RCF
maturity from September 2022 to November 2023 and amended the
covenants. Under the new agreement, the existing Facility A of
GBP107.8 million maturing in September 2022 and Facility B of GBP25
million maturing in January 2022, were replaced by a new RCF of
GBP90 million that reduced to GBP80 million on 30 January 2022
until maturity in November 2023. The amended revolving credit
facility includes among other changes, amendments to the quarterly
covenant tests on adjusted EBITDA, leverage ratio and fixed charge
cover. The Group has subsequently agreed with its lenders to adjust
the covenant tests over the remaining life of the facility to
provide more headroom for the Group given the prolonged disruption
of Covid-19 and the impact of the Omicron variant on the Group's
trading in the final weeks of the last financial year.
The existing lending syndicate continues to show ongoing support
to the Group.
Treasury risk management
The Group has exposure to foreign exchange fluctuations in
relation to purchases made in foreign currencies, principally the
US Dollar and the Euro. We realise a high proportion of natural
hedging of these currency exposures due to our business operations
in North America and Europe. The Group's risk management policy
allows for foreign currency to be hedged for up to 24 months in
advance.
The Group is also exposed to movements in exchange rates on
intercompany balances denominated in a foreign currency. These are
not hedged, and movement in foreign exchange rates can result in
gains or losses being recognised in the income statement.
The Group is exposed to movements in UK, European and US
interest rates as the revolving credit facility accrues interest.
This is based on the relevant SONIA (for sterling borrowing),
EURIBOR (for Euro borrowing) or SOFR (for US Dollar borrowing) rate
plus a margin. The Group does not hold any interest rate hedge
contracts.
Brexit
The 'transitional period' for Brexit ended on 31 December 2020,
introducing several complexities into the Group's operations
within, and distribution logistics to, Europe. To date, the main
operational effects have been on the flow of goods into the UK
through the ports, and distribution from the UK to stores,
territory licence partners, wholesale trustees and eCommerce
customers in Europe.
We have established a customs warehouse in the UK which became
operational in April 2021 and has partially mitigated the impact,
although we expect there to be an ongoing adverse gross margin
impact on our European sales for the foreseeable future.
Earnings per share and dividends
The basic loss per share was 19.3 pence (2021: loss per share
56.2p). Underlying loss per share, which excludes non-underlying
items, changed to a loss of 16.4 pence (2021: loss per share
26.0p).
With consideration to the current trading conditions and our
commitments under the RCF agreement, the Board has determined that
no final dividend is to be paid in respect of the 52 weeks ended 29
January 2022 (2021: nil). The Board remains committed to
reinstating shareholder distributions when it is financially viable
and responsible to do so.
Notes:
1. Constant currency compares the performance in local currency
at the same exchange rate for both periods, thereby removing the
impact of exchange rate fluctuations between periods.
2. Prior year revenue, gross margin and distribution costs are
adjusted to reflect the reclassification of delivery income from
cost of goods sold to revenue and certain elements of delivery cost
from costs of goods sold to distribution expenses. The prior year
is reported on a consistent basis to FY22.
3. Brand sales represents management's estimate of the end
retail sales value (excluding sales tax) to the consumer including
its own retail channels and those of its wholesale trustees, joint
venture partners, territorial licences (franchisees) and product
licencing sales.
Principal Risks and Uncertainties
The Board and the Audit & Risk Committee work together with
the Management Risk Committee to deal with different aspects of the
process. This includes:
-- Assessing and challenging the Group risk register
-- Reprioritising risks as new ones emerge or existing ones are
mitigated to an appropriate extent
-- Influencing mitigating actions
-- Escalating findings to the appropriate audience within the business.
We have a robust, ongoing process for identifying, evaluating
and managing the significant and emerging risks the Group
faces.
The tables that follow outline our principal risks and their
potential impact on the business, along with how we manage them and
how they've changed over the past year.
Market and economic risks
Risk and impact How we seek to mitigate the Movement in the
risk year
Covid [Down]
The Group remains exposed Our response to the disruption The global rollout
to future waves of Covid, felt by our people, operations of effective vaccines
which could again see and supply chains in the past appears to be reducing
measures like lockdowns, two years gives us a clear the need for government-enforced
enforced store closures, and well-tested set of responses restrictions. Meanwhile,
travel restrictions and to quickly: we have taken the
disruption to business * Minimise future impact on our operations risk out of our
operations and supply fixed cost base
chains as well as impacting and continued to
consumer shopping behaviours * Maximise sales through those channels, p diversify how we
with reduced city centre artners and source our products
footfall and demand for markets less impacted by restrictions. globally.
formalwear.
------------------------------------------------ ---------------------------------
Cost of living [Up]
Rising cost of living The Ted Baker brand is directed The rising costs
and declining real wages to a customer demographic of fuel, utilities
for many people will that may be somewhat insulated and food mean we're
mean less disposable from economic downturns. We seeing increased
income and reduced demand carefully monitor daily and consumer 'cost
for non-essential items. weekly sales data and update of living' across
This could mean we need our trading plans and stock our markets.
to discount surplus stock, purchases accordingly. Members
which would affect profitability of the Executive Team review
and cash flow as well and sign off markdowns or
as damage the Ted Baker price reductions.
brand.
------------------------------------------------ ---------------------------------
Product cost inflation [Up]
Increasing fuel, energy, We place orders with our suppliers The rising costs
labour and supply chain several months ahead of delivery of fuel, utilities,
costs are likely to put dates, helping us to lock labour, commodities
pressure on the cost in prices and react to future and freight are
price of our products. price increases. We look at likely to increase
This could lead to tighter many options - including selective the cost of goods
selling margins and lower price increases, sourcing purchased.
profitability. location and production efficiencies
- to mitigate the impact of
increased costs.
------------------------------------------------ ---------------------------------
Customer behaviour change [No change]
We fail to understand We maintain a high level of
and respond to changes market awareness and an understanding
in customer preferences of consumer trends and fashion
- for example, lack of - including using a leading
product diversity, preferred trends agency - so we can
shopping channel or influencer respond to changes in consumer
recommendation - which preference. We use customer
sees Ted Baker lose its data to develop targeted marketing
competitive edge. This and promotional activity.
could lead to a loss We continue to focus on product
of sales, reduced margins, design, quality and attention
missed opportunities to detail.
for growth and brand
dilution. After the year end we launched
our new web platform to enhance
our digital sales capability.
------------------------------------------------ ---------------------------------
FX rates [Up]
We purchase our products We maintain a regular and FX rate volatility
primarily in US Dollars rigorous forecasting cycle has increased,
and Euros but generate for purchases and sales. With given countries'
the largest proportion this, we apply our hedging different responses
of our sales in Pounds, policy under which we may to and recovery
followed by US Dollars. enter forward contracts to expectations from
hedge expected FX risks and Covid and since
Adverse movements in manage cost variations. the invasion of
FX rates could mean higher Ukraine.
cost prices for products
and lower margins and
profitability.
------------------------------------------------ ---------------------------------
Regulatory and political [No change]
changes We maintain a monitoring programme
Changes to regulation, for new rules, regulations,
duties, taxes and related taxes and duties that could
reporting requirements impact our products, packaging,
increase the cost and supply chains, people, data,
complexity of doing business other business activities
globally - for example, and reporting requirements.
Brexit and the increased The monitoring is done by
focus on sustainability internal subject-matter experts
and carbon reporting. and external advisers.
If we fail to comply
with regulations, we
could receive material
fines that would affect
cash flow and profitability.
------------------------------------------------ ---------------------------------
Brand, reputation and market position
Risk and impact How we seek to mitigate the Movement in the
risk year
Brand damage or dilution [Up]
The Ted Baker brand is We have a crisis management The impact of the
our biggest asset. Any protocol in place, supported global pandemic
action or event that by external advisers, to on business operations
damages the brand with rapidly and our supply
our customers could significantly communicate internally and chains, together
affect shareholder value externally about potentially with more geopolitical
and lead to lower sales. brand-damaging events. uncertainty, increases
the complexity
This could happen through We have a team of internal of, and inherent
a specific unforeseen stakeholders and external risk within, our
or mishandled event, consultants dedicated to operating environment.
or more gradually over protecting
time through insufficient Ted Baker's reputation. We Consumer expectations
focus, tracking and stewardship deal with reputational issues from brands they
of the brand across our swiftly and in a considered engage with have
channels, partners and way. also increased,
product assortment. so our responses
We carefully consider each to external events
new partner we do business and underlying
with. All our existing social trends are
partners increasingly scrutinised.
are subject to due diligence
and ongoing monitoring to
make sure they remain
appropriate
for the brand. New product
extension areas, including
through licensed partners,
are agreed by the Board.
------------------------------- ---------------------------
Product design [Up]
A revitalised product We have in-house design teams As we refresh the
mix with new product for all categories to make Ted Baker product
categories, combined sure the Ted Baker DNA is range across categories
with a change in focus reflected in new products. to make it more
on target audiences, contemporary, we
could send mixed messages The critical path for product increase the risk
to consumers. This could design includes prototypes of product-design
mean losing loyal core and samples, as well as a failures within
customers and failing 'sell-in' process to a seasonal range.
to engage new customers wholesale
and influencers. buyers. This process gives
us rich feedback on the
likely
success or failure of new
product designs.
------------------------------- ---------------------------
Strategy [No change]
Failing to deliver an The Group's Directors and
effective strategy could Executive Team regularly
mean Ted Baker doesn't monitor
realise its long-term and assess how well our
ambitions. strategy
and supporting execution
This could be caused plans
by: are being delivered. These
* Failing to implement the strategy because of poor plans are designed to
prioritisation or communication successfully
communicate and deliver the
strategy while mitigating
* Designing and implementing the wrong strategy any risk.
We monitor the external
* Failing to respond or pivot the strategy quickly environment
enough if the operating environment changes. to get regular insights into
and analysis of the market,
our competitors and our own
brand strength among our
target
customers. If this monitoring
highlights a significant
change
or trend, we review this at
Board and Executive Team
level
to work out if we need to
adjust or add to our
strategy.
------------------------------- ---------------------------
Diversity and inclusion [Up]
Without a sufficient The business has engaged a Although the underlying
focus on inclusion across specialist consultancy to importance and
all areas and levels support us as we build our risk has not changed
of the business, we risk inclusion strategy. We have from previous years,
not maximising the potential held listening sessions our awareness of
from a truly diverse across its importance
and inclusive team and the Group and are building to employees and
not being representative a clear plan to recognise customers has increased.
of either the communities inclusivity as a global
in which we operate or business.
our customer base.
Not addressing diversity
and inclusion in an authentic
and focused way could
result in adverse employee
and customer reaction
and reputational damage.
------------------------------- ---------------------------
Customer data [Up]
With a large and growing We maintain customer data Cybersecurity attacks
customer database and in a secure data environment. continue to increase
multiple touch points All employees involved in across all networks,
for our customers, it's customer data activities with a notable
imperative that customers receive step-up from the
trust us with their personal training in the requirements time of the invasion
data. - for example, in of Ukraine.
cybersecurity
An accidental or cybersecurity and GDPR.
breach of customer data
is likely to lead to We only provide customer data
reputational damage as to a third-party processor
well as significant fines where it's specifically
from relevant data authorities. allowed
in our data policy - and
where
the third party has been
evaluated
for their data-security
protocols.
You can find more information
in the next table under
Critical
business systems failure and
cybersecurity.
------------------------------- ---------------------------
Supply chain [Up]
We source product from All product suppliers are We added several
third-party factories required to sign up to our new suppliers in
across many markets, Code of Conduct and are new markets during
including China, Turkey, regularly the year as we
India and the EU. If audited to make sure they aimed to reduce
our suppliers fail to are compliant with our the risk of concentrating
comply with ethical standards, ethical our supply chains
it could be damaging standards and guidelines. in a single market.
to our brand and reputation.
------------------------------- ---------------------------
Operational
Risk and impact How we seek to mitigate the Movement in the
risk year
Significant business [Down]
disruption The severe disruption caused
A lack of resilience by the pandemic during the We launched a new
or business continuity past two years means we have cloud-based web
planning could mean failing well-rehearsed crisis management platform to increase
to withstand shocks or and business continuity plans resilience and
not adapting during a in place for a wide range support digital
crisis - for example, of operational and business sales in case of
failing to take more disruption scenarios. more store closures.
sales online when shops
are forced to close, Our Board and Executive Team We continued to
or not adapting and communicating have developed agile ways reduce our fixed
effectively during Covid-related of working to rapidly identify, cost base and financial
lockdowns, store closures evaluate and respond to significant commitments, such
and work-from-home mandates. business disruptions. as through store
leases with shorter
Our diversified sales channels terms and lower
across owned and partner, rents.
physical and digital channels
in several markets provides
us with some inbuilt mitigation.
--------------------------------------------- ---------------------------
Supply-chain disruption [Up]
Supply-chain disruption We restructured and upskilled We've seen continued
can mean a delay in receiving our in-house global shipping high sea-freight
seasonal product and/or team and established new freight-forwarder costs and shipping
increased freight costs. relationships to provide more delays because
We may need to use higher-cost options and agility in sea-freight of Covid and geopolitical
air freight to make sure bookings and freight-cost upheavals. This
product is delivered management. has led to HGV-driver
on time. shortages and increased
We have worked to secure freight costs to inbound
Significant product delays bookings in advance at committed land freight.
can lead to late deliveries rates and, where necessary,
to our retail channels used air freight to make sure
and wholesale partners, key products are received
which could result in on time.
higher markdowns. Higher
freight costs will affect
our product margins if
no action is taken.
--------------------------------------------- ---------------------------
Critical business systems [No change]
failure and cybersecurity The Audit & Risk Committee As the frequency
The loss of a critical periodically reviews cyber of attempted cyberattacks
business system for an risk as a specific topic and has increased across
extended period through tracks how our agreed improvement the internet, so
general failure or a actions are progressing. we have continued
cyberattack could prevent to invest in and
us from delivering sales During the year we introduced develop our cyber
through our retail channels a new security manager role defences.
or prevent our employees and adopted new security measures.
from being able to undertake
key activities to operate We have mandatory training
our business and safeguard modules for all employees
our assets. and regularly test our cyber
defences at the network, system
Development and implementation and individual level.
of new systems and interfaces
can result in increased The Group also has a clear
risk. and robust approach to change
management, with project managers
to oversee major projects
with key business stakeholders.
We have a steering committee
- which includes senior team
members across IT, legal and
procurement, and external
professional advisers as required
- to review major IT projects.
--------------------------------------------- ---------------------------
New suppliers [No change]
A failure to adequately We have rigorous supplier
evaluate suppliers, set evaluation processes and have
up suitable commercial reduced the number of suppliers
contracts or establish we work with globally, concentrating
supplier management protocols on our strongest partnerships.
(including ongoing monitoring)
could leave Ted Baker All the product we receive
exposed to supplier failure, from new suppliers is subject
an inability to source to quality-control checks.
goods, product quality
issues and/or reputational
risks. These could manifest
as missed sales opportunities,
excess stock and adverse
margin, profitability
and cash effects.
--------------------------------------------- ---------------------------
Talent management [No change]
Failing to attract, motivate Each year the Remuneration
and retain great talent Committee reviews our people
could mean we can't achieve strategy and performance metrics,
our strategic goals because including employee retention,
we lack the innovation, diversity and inclusion, and
capabilities and diversity reward benchmarking.
to deliver our strategy
and respond to customer An annual benchmarking review
and market needs. makes sure we offer competitive
remuneration and total reward
Failing to attract new packages. We also use long-term
team members with the share-based incentive schemes
right capabilities or to retain key talent.
to be competitive in
the market (salaries, We drive employee engagement
benefits and flexible through our culture, values
working) could also make and working environment, and
it harder for us to deliver measure this with an annual
our transformation strategy. survey. Specific action plans
are developed for any areas
of improvement identified
in the survey.
Succession plans are in place
and have been reviewed during
this reporting period.
The Group has put policies
and procedures in place to
detect and deal with any issues
our people raise. This includes
an independent helpline.
--------------------------------------------- ---------------------------
Financial, legal and regulatory
Risk and impact How we seek to mitigate the Movement in the
risk year
Financial commitments [Down]
and capital expenditure The Board approved a 'capital-light' We have made good
Poor management of our growth strategy, growing our progress on our
financial commitments, brand presence and sales through store lease programme,
including longer-term third-party partners and reducing reducing lease
liabilities and capital our capital investment. commitments and
expenditure, could mean increasing lease
we're not as flexible To help deliver against this flexibility.
or responsive in adapting strategy and give us control,
to external market challenges we have an Investment Committee
like Covid restrictions, that reviews and approves
supply chain disruption all capital expenditure and
and cost inflation, or longer-term financial commitments,
to specific changes affecting including new or renewing
the retail sector. leases and partnerships.
Store leases make up a significant
proportion of our longer-term
liabilities. We have a programme
to reduce store lease commitments
through shorter leases and
reduced and turnover-only
rents. We will only enter
into a new lease or renew
an existing one if it meets
our financial return and pay-back
criteria.
We make sure that appropriate
depreciation and amortisation
periods are used to reduce
the risk of unexpected (non-cash)
write-offs, and we do asset
impairment reviews twice a
year.
--------------------------------------- ------------------------
Financial borrowings, [No change]
liquidity and credit Ted Baker has a central treasury In May 2021 we
risk function that oversees liquidity, extended our revolving
We rely on financing FX, financing costs and lender credit facility
from banks and/or capital relationships. We maintain to November 2023
markets to fund working regular and active contact and amended the
capital and business with our lending banks. covenants.
operations over the short
and medium term. Short-term and long-term cash This was further
flow and liquidity forecasts amended in April
We are exposed to credit are updated on a regular basis 2022, to provide
risk and financial loss and made available to the sufficient headroom
through non-payment from Board. Two members of the for the severe
our wholesale customers. Executive Board, including but plausible
the Chief Financial Officer, projections as
review and approve the short-term outlined in the
cash flow forecast each month. going concern
assessment.
Debtor balances are reviewed
each month too, and any past
due balances are followed
up. We establish and maintain
credit limits for all trade
customers.
--------------------------------------- ------------------------
Inventory levels [No change]
Inventory purchase commitments We use data to forecast demand
are made several months on a rigorous and regularly
before the finished products updated cycle. This allows
arrive at our own and us to order the right amount
third-party distribution of stock. Budgets to buy inventory
centres and stores for are signed off at Executive
sale to end customers. level each season.
Inaccurate forecasting, We hold weekly and monthly
lack of relevance to trading review meetings to
customers or other market look at sales and stock levels
conditions could leave at a granular level. This
us with excessive stock means we can take swift action
that we'd have to discount if we're selling less of some
or write off. This would products than expected and
impact our profitability so minimise the amount we
and cash flow. might have to discount.
Poor inventory controls, We do regular stock counts
and complexity in accounting across our stock-holding locations
for duty and freight and apply an inventory-obsolescence
and other related costs policy to older items.
of goods, could result
in a write off that damages
profitability and asset
values.
--------------------------------------- ------------------------
Control environment [No change]
Insufficient or inadequate During the second half of
checks, controls and the year we established an
processes could result Internal Audit team. The team
in limited financial is developing a plan to review
oversight, leading to and report on the priority
errors, misstatement control areas for the Audit
or fraud. & Risk Committee.
A weak control environment
could lead to poor business
decisions or decisions
made by team members
who do not have adequate
insight or authority
- for example, changing
supplier or customer
payment terms, or making
decisions around the
stock we hold or need
to buy.
A weak control environment
could also make it harder
to forecast revenues
and profits and lead
to inaccurate accounting.
--------------------------------------- ------------------------
Group Income Statement
For the 52 weeks ended 29 January 2022
52 weeks ended 29 January 53 weeks ended 30 January
2022 2021
Note Underlying Non-underlying Total Underlying Non-underlying Total
items(2) (Restated)(1) items(2) (Restated)(1)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 3 428,240 - 428,240 355,271 - 355,271
Cost of sales (191,883) 1,220 (190,663) (162,918) (7,957) (170,875)
Gross
profit/(loss) 236,357 1,220 237,577 192,353 (7,957) 184,396
Distribution
costs (184,086) (2,988) (187,074) (177,495) (45,303) (222,798)
Administrative
costs (85,803) (10,062) (95,865) (71,025) (13,402) (84,427)
Other operating
income
and expenses 5 2,831 7,966 10,797 6,488 17,446 23,934
Operating loss (30,701) (3,864) (34,565) (49,679) (49,216) (98,895)
Share of
post-tax
(losses)
from joint
ventures (1,270) - (1,270) (1,136) (7) (1,143)
Finance income 6 259 - 259 399 655 1,054
Finance expense 6 (6,699) (1,775) (8,474) (8,745) - (8,745)
Loss before tax 4 (38,411) (5,639) (44,050) (59,161) (48,568) (107,729)
Taxation 8,160 306 8,466 19,149 2,135 21,284
----------- --------------- ---------- -------------- --------------- --------------
(Loss) after
tax
attributable
to owners of
the Company (30,251) (5,333) (35,584) (40,012) (46,433) (86,445)
----------- --------------- ---------- -------------- --------------- --------------
Loss per share 7
Basic (19.3p) (56.2p)
Diluted (19.3p) (56.2p)
(1) More details of the restatement are found in Note 2
(2) More details on non-underlying items and a reconciliation of
Alternative Performance Measures are included in Note 4
The accompanying notes are an integral part of the financial
statements.
Group Statement of Comprehensive Income
For the 52 weeks ended 29 January 2022
52 weeks 53 weeks
ended ended
29 January 30 January
2022 2021
GBP'000 GBP'000
(Loss) after tax attributable to owners of
the company (35,584) (86,445)
------------ ------------
Other comprehensive (loss)/income
Items that may be reclassified to the Income
Statement
Net effective portion of changes in fair value
of cash flow hedges 1,084 (422)
Exchange differences on translation of foreign
operations net of tax 1,567 (746)
------------ ------------
Other comprehensive income/(loss) for the period 2,651 (1 ,168)
Total comprehensive (loss) for the period (32,933) (87,6 13)
============ ============
The accompanying notes are an integral part of the financial
statements.
Group Statement of Changes in Equity
For the 52 weeks ended 29 January 2022
Total equity
attributable
to equity
Translation Retained shareholders
Share capital Share premium Other reserves reserve earnings of the parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 30
January 2021 9,230 101,304 (1,165) 5,582 37,085 152,036
--------------- --------------- --------------- -------------- --------------- --------------
Comprehensive
loss for the
period
Loss for the
period - - - - (35,584) (35,584)
Exchange
differences on
translation of
foreign
operations - - - 1,912 - 1,912
Current tax on
foreign
currency
translation - - - (345) - (345)
Effective
portion of
changes in
fair value of
cash flow
hedges - - (44) - - (44)
Transferred to
initial
carrying
amount of
inventory - - 1,184 - - 1,184
Deferred tax
associated
with movement
in hedging
reserve - - (56) - - (56)
--------------- --------------- --------------- -------------- --------------- --------------
Total
comprehensive
loss for the
period - - 1,084 1,567 (35,584) (32,933)
--------------- --------------- --------------- -------------- --------------- --------------
Transactions
recognised
directly in
equity
Increase in - - - - - -
issued share
capital
Share-based
payment
charges - - - - 1,290 1,290
Movement on
current and
deferred tax
on share-based
payments - - - - (5) (5)
--------------- --------------- --------------- -------------- --------------- --------------
Total - - - - 1,285 1,285
--------------- --------------- --------------- -------------- --------------- --------------
Balance at 29
January 2022 9,230 101,304 (81) 7,149 2,786 120,388
=============== =============== =============== ============== =============== ==============
Group Statement of Changes in Equity
For the 53 weeks ended 30 January
2021
Share Share Other Translation Retained Total equity
capital premium reserves reserve earnings attributable
to equity
shareholders
of the Company
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 25
January 2020 2,228 10,555 (743) 6,328 122,305 140,673
--------- --------- ---------- ------------ ---------- ----------------
Comprehensive
(loss)/income for
the period
Loss for the period - - - - (86,445) (86,445)
Exchange differences
on translation
of foreign operations - - - (1,333) - (1,333)
Current tax on
foreign currency
translation - - - 587 - 587
Effective portion
of changes in fair
value of cash flow
hedges - - (428) - - (428)
Deferred tax associated
with movement in
hedging reserve - - 6 - - 6
--------- --------- ---------- ------------ ---------- ----------------
Total comprehensive
loss for the period - - (422) (746) (86,445) (87,613)
--------- --------- ---------- ------------ ---------- ----------------
Transactions recognised
directly in equity
Increase in issued
share capital 7,002 90,749 - - - 97,751
Share-based payment
charges - - - - 1,204 1,204
Movement on current
and deferred tax
on share-based
payments - - - - 21 21
--------- --------- ---------- ------------ ---------- ----------------
Total 7,002 90,749 - - 1,225 98,976
--------- --------- ---------- ------------ ---------- ----------------
Balance at 30
January 2021 9,230 101,304 (1,165) 5,582 37,085 152,036
========= ========= ========== ============ ========== ================
Group Balance Sheet
At 29 January 2022
Note Group Group
29 January 30 January
2022 2021 Restated(1)
GBP'000 GBP'000
Intangible assets 8 28,421 34,758
Property, plant and equipment 9 30,200 39,401
Right-of-use assets 14 63,519 81,759
Investment in joint ventures 2,421 3,691
Deferred tax assets 10 35,187 27,635
Prepayments 84 541
----------- ------------------
Non-current assets 159,832 187,785
----------- ------------------
Inventories 11 103,071 87,848
Trade and other receivables 12 56,660 44,666
Amounts due from JV 12 4,505 4,305
Income tax receivable 1,293 7,983
Cash and cash equivalents 14,515 66,671
----------- ------------------
Current assets 180,044 211,473
----------- ------------------
Total assets 339,876 399,258
----------- ------------------
Trade and other payables 13 (76,893) (86,829)
External borrowings (8,000) -
Bank overdraft (3,417) -
Income tax payable (3,028) (2,607)
Lease liabilities 14 (43,129) (45,063)
Provisions (199) (1,973)
Derivative financial liabilities (75) (1,191)
----------- ------------------
Current liabilities (134,741) (137,663)
----------- ------------------
Provisions (2,862) (2,942)
Lease liabilities 14 (81,805) (106,617)
Deferred tax liabilities 10 (80) -
Non-current liabilities (84,747) (109,559)
----------- ------------------
Total liabilities (219,488) (247,222)
----------- ------------------
Net assets 120,388 152,036
=========== ==================
Share capital 9,230 9,230
Share premium 101,304 101,304
Other reserves (81) (1,165)
Translation reserve 7,149 5,582
Retained earnings 2,786 37,085
Total equity attributable to
equity shareholders of the parent
Company 120,388 152,036
----------- ------------------
Total equity 120,388 152,036
=========== ==================
(1 More details of the restatement are found in Note 2)
Group Cash Flow Statement
For the 52 weeks ended 29 January 2022
Group Group
52 weeks 53 weeks
ended ended
29 January 30 January
2022 2021
Cash generated from operations GBP'000 GBP'000
(Loss)/profit for the period (35,584) (86,445)
Adjusted for:
Income tax credit (8,466) (21,284)
Depreciation and amortisation 36,738 53,109
IFRS 16 modifications 2,475 -
Amortisation of reacquired right - 1,746
Impairment 2,988 45,303
(Profit)/Loss on disposal of business - (17,446)
(Profit) / loss on disposal of property,
plant and equipment and right of use
assets (979) 933
Write off property, plant and equipment 1,285 325
Share-based payments charge 1,290 1,204
Net finance expense 5,539 7,691
Change in accounting estimates for inventory -
IFRS 16 practical expediency 361 (361)
Net change in derivative financial assets
and liabilities carried at fair value
through profit or loss - -
Share of loss in joint venture 1,270 1,143
Increase in provisions 3,074 4,915
Decrease in non-current prepayments 406 126
Decrease / (increase) in inventory (15,146) 43,821
Decrease / (increase) in trade and other
receivables (5,333) 21,966
Increase/(decrease) in trade and other
payables (21,842) (8,135)
Income taxes received/(paid) 8,090 4,021
Net cash (used in)/ generated from
operating activities (23,834) 52,632
------------ ------------
Cash flow from investing activities
Purchases of property, plant and equipment
and intangibles (7,533) (6,981)
Proceeds from sale of property, plant
and equipment 237 77,782
Investment in equity accounted investee - -
Increase in loans to Group companies - -
Interest received 206 94
Dividends received from joint venture - 254
Payments (to)/from joint venture (200) 157
------------ ------------
Net cash (used in)/ generated from
investing activities (7,290) 71,306
------------ ------------
Cash flow financing activities
Repayment of borrowings (18,000) (180,000)
Proceeds from borrowings and overdraft 29,402 -
Repayment of capital element of leases (29,278) (19,877)
Repayment of interest element of leases (5,487) (4,640)
Interest paid (292) (1,974)
Dividends paid - -
Proceeds from issue of shares - 105,003
Cost of issue of shares - (7,252)
------------ ------------
Net cash (used in)/ generated from
financing activities (23,655) (108,740)
------------ ------------
Net increase/(decrease) in cash and
cash equivalents (54,779) 15,198
Net cash and cash equivalents at the
beginning of the period 66,671 52,912
Exchange rate movement 2,623 (1,439)
------------ ------------
Net cash and cash equivalents at the
end of the period 14,515 66,671
------------ ------------
Notes to the Financial Statements
1. Basis of Preparation of Preliminary Announcement
The preliminary consolidated financial information for the 52
weeks ended 29 January 2022 was approved by the Directors on 26 May
2022.
This preliminary consolidated financial information has been
prepared in accordance with the principles of UK-adopted
International Financial Reporting Standards ('IFRS') and has been
prepared on a going concern basis. The preliminary consolidated
financial information does not constitute statutory consolidated
financial statements for the 52 weeks ended 29 January 2022, or the
53 weeks ended 30 January 2021, as defined in section 434 of the
Companies Act 2006 ('statutory accounts') but is derived from those
financial statements. Whilst the financial information included in
this announcement has been computed in accordance with the
recognition and measurement requirements of UK-adopted IFRS, this
announcement does not itself contain sufficient disclosures to
comply with IFRS.
The Group's Annual Report and Group Financial Statements for the
52 weeks ended 29 January 2022 were approved by the Directors on 26
May 2022. The report of the auditor on the consolidated financial
statements, contained therein, was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement
under section 498 of the Companies Act 2006. The statutory accounts
for the 52 weeks ended 29 January 2022 will be filed with the
Registrar in due course.
Statutory accounts for the 53 weeks ended 30 January 2021 have
been delivered to the Registrar of Companies. The auditor's report
on those accounts was qualified solely in respect of comparative
figures. The auditor's report did not contain a statement under
Section 498 (2) of the Companies Act 2006 but contained a statement
under Section 498(3) that they had not obtained all the information
and explanations that they considered necessary for the purpose of
their audit, solely in respect of the matter described hereafter.
The Group recorded, in its financial statements for the 52 weeks
ended 25 January 2020, a number of adjustments to inventory values,
including amendments to inventory which had been overstated at 26
January 2019. The auditors were unable to determine what the impact
of these adjustments would have been on inventory values at 26
January 2019 and consequently on retained profit at that date and
on the income and expenditure and calculated cash flows for the 52
week period ended 25 January 2020. Accordingly, the auditors were
unable to determine whether the comparative figures shown in the
financial statements relating to that period were prepared on a
fully comparable basis.
2. Changes in Accounting Estimates, Errors or Misstatements
Changes in accounting estimates and policies
Carrying amount of inventories
The carrying value of inventory is recorded at the lower of cost
and net realisable value. The Group manages inventory on an
expected two-year life cycle within its own retail channels. At the
end of two years, remaining stock is managed out of the business
through a variety of channels and partners in order to recover as
much of the original cost as possible. The final part of this
process involves offering stock to certain operators at much
reduced prices - the final 'liquidation' of the stock holding. In
the previous year the provision was calculated based on reviewing
the physical stock on hand by season at the period end and forward
forecasting the expected terminal stock value after two years,
reflecting the expected sales levels in all channels. At that point
in time, the provision was calculated, based on the net realisable
value of the estimated inventory on hand at that point. As there
becomes more certainty about the future, with the impact of
disruption from future lockdowns diminishing, management believes
that future forecast sales are less relevant than provisioning by
season based on recent trading patterns. As such the current model
is no longer deemed to be appropriate and during the period ended
29 January 2022, management has changed the basis of determining
the inventory obsolescence. The new provisioning policy is based on
reviewing the percentage of an original stock season that has
entered the liquidation stage and the cost recovered at that time.
The percentage of each season's total stock purchases that is still
on hand at the end of the period is determined and the amount of
this stock that is expected to enter the liquidation stage is
calculated. The liquidation cost recovery percentage is then
applied to this to obtain the provisioning percentage by season and
this is used to update the actual provision by season. The two key
sensitivities to the calculation of the provision are the
percentage of the original stock season entering into the
liquidation stage and the percentage of cost that is recovered. A
10% increase/reduction in the amount of stock entering into the
liquidation stage would result in an additional charge or reduction
in the charge of GBP0.9m or GBP0.3m respectively. A 10%
reduction/increase in the liquidation cost recovery rate would lead
to an additional charge of GBP0.7m or a reduction in the charge of
GBP0.5m respectively.
At 29 January 2022, the inventory provision was GBP8.1m (2021:
GBP17.4), representing 7.4% (2021: 17.0%) of the gross carrying
value of inventory. The impact of the change in the basis of the
calculation of the estimate for inventory provisioning was a
GBP10.0m reduction.
Change in presentation of carriage costs
In the year ended 29 January 2022, management concluded that
only costs of delivering stock to the warehouse and carriage costs
out of the warehouse associated with online sales and retail should
be considered in cost of sales. All other carriage costs out of the
warehouse should be treated as distribution costs. The prior year
numbers have been restated with an increase in distribution costs
of GBP1.6mil and a decrease in Cost of sales of the same amount.
There is no impact on operating loss, but gross profit has
increased due to the GBP1.6m reclassification to distribution
costs.
Capitalisation of configuration and customisation costs in SaaS
arrangements
The customisation and configuration activities undertaken in
implementing SaaS software may include the development of code that
enhances and modifies or creates additional capability to the
existing software installed on Company's servers. Where this is the
case the costs of customisation and configuration are capitalised.
Where the customisation and configuration activities are performed
on the internal infrastructure of the cloud service provider, the
activities are not enhancing or modifying an asset the company
controls and therefore the costs are expensed in the income
statement.
In the year ending 29 January 2022, GBP6.5m of costs of relating
to the implementation of the Group's new website has been expensed
through the income statement within non-underlying expenses and
GBP1.0m of costs relating to the implementation of other SaaS
software have been expensed within underlying expenses. GBP1.3m of
new website costs which had previously been capitalised in the
prior year has been expensed in the current year within non
underlying expenses.
Total amount capitalised in the year in relation to
implementation of SaaS software was GBP2.5m, which includes GBP2.0m
relating to the new website).
Errors or misstatements
Prior Year Adjustment - Balance Sheet and Cash flow statement
Reclassification relating to Lease Liabilities
In the comparative period, there was a material impact to timing
and amount of rental payments during the Covid crisis, as payments
to landlords were delayed. The lease liability balance disclosed in
our Condensed Group Balance Sheet was understated with the
corresponding delayed payments due to landlords being disclosed
within Trade and other payables. The Balance Sheet as at 30 January
2021 has been restated to reclassify these balances, reducing Trade
and other payables and increasing Current Lease Liabilities (2021:
GBP11.3m). This is a reclassification within the Balance sheet with
no change to Net Assets. This had a corresponding impact on the
Condensed Group Cash Flow Statement with lease payments being
overstated (capital of GBP9.2m and Interest of GBP2.1m), whilst
decrease in Trade and other payables was understated. This
decreased net cash generated from operating activities by GBP11.3m
and increased net cash from financing activities by GBP11.3m. There
is no impact on the net decrease in cash and cash equivalents.
There is no restatement impact on the Income Statement or Retained
Earnings.
Prior year adjustment - delivery income
In year ended 2021, delivery income generated through online
sales was included within cost of sales rather than shown within
revenue. Therefore, the prior year numbers have been restated with
an increase in revenue of GBP3.3mil and an increase in Cost of
sales of the same amount. There is no impact on gross profit or
operating loss.
3. Segment Information
The Group has three reportable segments: retail, wholesale and
licensing. For each of the three segments, the Executive Committee
(considered to be the Chief Operating Decision Maker) reviews
internal management reports on a four-weekly basis.
The accounting policies of the reportable segments are the same
as those used in the preparation of the Group financial statements.
Information regarding the results of each reportable segment is
included below. Performance for the retail segment is measured
based on operating contribution, whereas performance of the
wholesale segment is measured based on gross profit and performance
of the licensing segment is measured based on royalty income, as
included in the internal management reports that are reviewed by
the Board.
Segment results before non-underlying items are used to measure
performance as management believes that such information is the
most relevant in evaluating the performance of certain segments
relative to other entities that operate within these industries.
Inter-segment pricing is determined on an arm's length basis.
a) Segment revenue and segment result
52 weeks ended 29 January 2022 Retail Wholesale Licensing Total
---------------------------------------------------- ---------- ---------- ---------- -----------
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 301,916 111,169 15,155 428,240
Cost of sales before non-underlying items (121,134) (70,749) - (191,883)
---------- ---------- ---------- -----------
Gross profit before non-underlying items 180,782 40,420 15,155 236,357
Operating costs (169,722) - - (169,722)
---------- ---------- ---------- -----------
Operating contribution before non-underlying items 11,060 40,420 15,155 66,635
Reconciliation of segment
result to loss before tax
Segment result before non-underlying items 11,060 40,420 15,155 66,635
Other operating costs - - - (100,167)
Other operating income - - - 2,831
-----------
Operating loss before non-underlying items (30,701)
Finance income - - - 259
Finance expense - - - (6,699)
Share of losses from joint ventures - - - (1,270)
-----------
Loss before tax and non-underlying items (38,411)
===========
Non-underlying items before tax - - - (5,639)
===========
Loss before tax (44,050)
===========
Depreciation and amortisation (9,038) (281) - (9,319)
Unallocated depreciation and amortisation - - - (10,798)
Depreciation of right of use assets - - - ( 16,621 )
-----------
Total depreciation and amortisation (36,738)
===========
(1) Unallocated assets include prepayments, derivatives and
central allocations of inventory, cash and cash equivalents and
other receivables.
(2) Unallocated liabilities include derivatives and central
allocations of trade and other payables and borrowings.
53 weeks ended 30 January 2021 (Restated(3) ) Retail Wholesale Licensing Total
----------------------------------------------------------- ---------- ---------- ---------- ----------
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 257,544 85,278 12,449 355,271
Cost of sales before non-underlying (111,390) (51,528) - (162,918)
---------- ---------- ---------- ----------
Gross profit before non-underlying items 146,154 33,750 12,449 192,353
Operating costs (165,458) - - (165,458)
---------- ---------- ---------- ----------
Operating (loss)/contribution before non-underlying items (19,304) 33,750 12,449 26,895
Reconciliation of segment
result to loss before tax
Segment result before non-underlying items (19,304) 33,750 12,449 26,895
Other operating costs - - - (83,062)
Other operating income - - - 6,488
----------
Operating loss before non-underlying items (49,679)
Finance income - - - 399
Finance expense - - - (8,745)
Share of losses from joint ventures - - - (1,136)
----------
Loss before tax and non-underlying items (59,161)
==========
Non-underlying items before tax - - - (48,568)
----------
Loss before tax (107,729)
==========
Depreciation and amortisation (7,493) (206) - (7,699)
---------- ---------- ---------- ----------
Unallocated depreciation and amortisation - - - (20,393)
Depreciation of right of use assets - - - (26,763)
----------
Total depreciation and amortisation (54,855)
==========
(1) Unallocated assets include prepayments, derivatives and
central allocations of inventory, cash and cash equivalents and
other receivables.
(2) Unallocated liabilities include derivatives and trade and
other payables and borrowings.
(3) More details of the restatement are found in Note 2
b) Geographical information
UK US Rest of the World(2) Total
-------------------------------- -------- -------- --------------------- --------
GBP'000 GBP'000 GBP'000 GBP'000
52 weeks ended 29 January 2022
Revenue 262,228 116,611 49,401 428,240
Non-current assets(1) 99,031 11,854 11,368 122,253
53 weeks ended 30 January 2021
Revenue 217,726 95,084 42,461 355,271
Non-current assets(1) 136,641 16,214 3,604 156,459
--------------------------------
(1) Non-current assets exclude deferred tax assets and
investment in joint ventures.
(2) Rest of the World includes Europe, Canada, and South
Africa.
c) Revenue by collection(1)
52 weeks ended 53 weeks ended
29 January 30 January
2022 2021
--------------- --------------- ---------------
GBP'000 GBP'000
Menswear(1) 138,677 119,790
Womenswear(1) 270,892 219,744
409,569 339,534
=============== ===============
(1) Revenue by collection includes retail and wholesale revenue
and excludes licence income and delivery income.
d) Retail revenue
52 weeks ended 53 weeks ended
29 January 30 January
2022 2021
------------- --------------- ---------------
GBP'000 GBP'000
Stores 168,130 109,342
E-commerce 133,786 148,202
301,916 257,544
=============== ===============
4. Loss Before Tax
Loss before tax is stated after charging/(crediting): 52 weeks 53 weeks ended
ended 30 January
29 January 2021
2022
------------ ---------------
GBP'000 GBP'000
Depreciation and amortisation(1) 36,738 53,109
Non-underlying items (further detail
below) 5,639 48,568
Leasehold properties:
Variable rental payments(2) 4,134 1,728
Concessions:
Minimum contract payments(2) 617 3,621
Variable rental and commission payments(2) 23,351 39,325
(Profit)/ loss on sale of property,
plant and equipment and intangibles (979) 933
Practical expedient on IFRS 16 361 (361)
Government schemes (3) (3,599) (10,545)
Close out of foreign exchange hedge
contracts - (6,916)
Gain on lease modifications (891) (2,992)
Auditors' remuneration:
Audit of these financial statements 250 150
Amounts receivable by the Company's
auditors and their associates in respect
of:
Audit of financial statements of subsidiaries
of the Company 1,115 754
Interim financial statements review 215 130
Other statutory auditors 110 73
Other assurance services 30 -
(1) The Group has applied IFRS 16. Depreciation of right-of-use
asset of GBP16.6m (2021: GBP26.8m) has been included within
GBP36.7m above (2021: GBP53.1m).
(2) Disclosed above are the variable rentals charged relating to
leasehold properties and rentals charged in relation to concession
arrangements. These are either fixed in nature or variable based on
revenue levels for a particular store or concession, where
relevant, including e-commerce sales with concession partners not
meeting the definition of a lease under IFRS 16.
(3) Support received from governments around the world to
support businesses throughout the Covid-19 epidemic. Payments from
the UK government for furloughed employees amounted to GBP1.4m
(2021: GBP8.5m).
Reconciliation of profit before tax to profit before tax and
non-underlying items:
52 weeks ended 53 weeks
29 January ended
2022 30 January
2021
--------------------------------------------- ----------- --------------- ------------
GBP'000 GBP'000
Loss before tax (44,050) (107,729)
--------------- ------------
Non-underlying items
Included in cost of sales:
Inventory changes in estimates 1 - (6,065)
Onerous contract provision 2 1,171 (1,973)
Other 49 81
--------------- ------------
Included in gross profit 1,220 (7,957)
Included in distribution costs :
Impairment of intangibles, property,
plant and equipment and right-of-use
assets 3 (2,988) (45,303)
Included in administrative costs:
Acquisition costs and unwind of fair
value accounting adjustments 4 - (1,987)
Reorganisation, restructuring costs and
other legal and professional costs 5 (2,231) (11,415)
Digital platform - 'SaaS' cost 6 (7,831) -
Included in other operating loss:
Gain on sale and lease back of head office 7 - 17,446
Head office exit receivable 8 7,966 -
Included in operating loss (3,864) (49,216)
Included in share of post-tax profits
from joint venture:
Unwind of fair value adjustments - (7)
Included in finance income/(expense):
Foreign exchange on the translation of
monetary assets and liabilities denominated
in foreign currencies 9 (1,775) 655
--------------- ------------
Non-underlying items (5,639) (48,568)
--------------- ------------
(Loss)/profit before tax and non-underlying
items (38,411) (59,161)
--------------- ------------
Notes
1. Logistics and freight costs previously capitalised in stock
were expensed in FY21 following a change in estimate.
2. Details of the onerous contract provision can be found in the annual report & accounts
3. The Group impaired a number of assets resulting in a charge
of GBP3.0m (2021: GBP45.3m), including key money, leasehold
improvements and right-of-use assets. This is net of a release in
prior year impairments caused by lease modifications, amounting to
GBP0.8m.
4. Charges in the prior period relate to amortisation of
reacquired rights, fair value and accounting adjustments in
relation to the acquisition of the footwear business in financial
year 2019.
5. A number of costs were incurred during the year, relating to
the restructuring and reorganisation of the business. These
include:
a. GBP0.4m (2021: GBP3.7m) for redundancy costs.
b. GBP1.7m (2021: GBP5.3m) for restructuring costs
c. GBP0.1m (2021: GBP2.5m) for other legal and professional fees
6. GBP7.8m of costs relating to cloud-based website have been
expensed in the current year. See Note 2 for accounting policy
applied on capitalisation of configuration and customisation costs
in SaaS arrangements.
7. Relates to the sale and lease back of the corporate head office building.
8. The Group is due GBP8.0m from the landlord when it exits its
current head office building. This amount crystallised in the half
year when the Group did not exercise its option on an alternative
building owned by the landlord. Receipt of funds is expected in
FY23.
9. Foreign exchange loss on re-translation of intercompany
balances denominated in foreign currencies.
5. Other Operating Income and Expenses
52 weeks ended 53 weeks ended
29 January 30 January
2022 2021
--------------- ---------------
GBP'000 GBP'000
Close out of foreign exchange hedge
contracts - 6,916
Gain on sale and lease back of head
office - 17,446
Other 1,852 505
Head office exit receivable 7,966 -
--------------- ---------------
9,818 24,867
Gain/(loss) on disposal of fixed assets 979 (933)
--------------- ---------------
10,797 23,934
=============== ===============
The Group is due GBP8.0m from the landlord when it exits its
current head office building. This amount crystallised in the half
year when the Group did not exercise its option on an alternative
building owned by the landlord. Receipt of funds is expected in
FY23.
The close out of foreign exchange hedge contracts is the gain
from the early termination of forward contracts during the year
that were taken out to hedge the purchase of inventory. These
inventory orders were cancelled and as a result the contracts were
no longer required. The Company took advantage of the favourable
sterling dollar exchange rate at the time to close the contracts
and record a gain.
A net gain of GBP17.4m on the sale and lease back transaction of
the Group's head office ('UBB') has been recorded in 2021 as the
Group sold UBB and immediately reacquired the use of the asset by
entering into a lease with the landlord. The head office freehold
asset has been derecognised on completion of the sale and a lease
liability and right-of-use asset recognised in relation to the
lease back.
6. Finance Income and Expenses
52 weeks ended 53 weeks ended
29 January 30 January
2022 2021
--------------- ---------------
GBP'000 GBP'000
Finance income
- Interest receivable 259 94
- Foreign exchange gains - 960
259 1,054
=============== ===============
Finance expenses
- Interest payable (311) (1,964)
- Interest on lease liabilities (1) (5,487) (6,781)
- Foreign exchange losses (2,676) -
(8,474) (8,745)
=============== ===============
(1) Interest on lease liabilities includes GBP0.5m reduction of
interest for the year due to modifications made to IFRS 16
leases.
7. Earnings Per Share
52 weeks ended 53 weeks ended
29 January 30 January
2022 2021
---------------------------------------- --------------- ---------------
Number of shares: Number Number
Weighted number of ordinary shares
outstanding 184,610,683 153,941,467
Earnings: GBP'000 GBP'000
Loss for the period basic and diluted (35,584) (86,445)
Underlying (loss)/profit(1) (30,251) (40,012)
Basic loss per share (19.3p) (56.2p)
Underlying (loss)/earnings per share(1) (16.4p) (26.0p)
Diluted loss per share (19.3p) (56.2p)
Underlying diluted (loss)/earnings
per share(1) (16.4p) (26.0p)
Due to the loss-making position at the year end, all potential
ordinary shares (see Note 25) are considered to be
antidilutive.
(1) Underlying profit for the period and underlying earnings per
share is shown before non-underlying items. Non-underlying items
net of tax were GBP5.6m (2021: GBP46.4m).
8. Intangible Assets
Reacquired Key money Computer software Computer software Total
right under development
-------------------- ---------- -------------------- ------------------ ------------------- -------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 30 January 2021 3,781 617 60,510 1,568 66,476
Additions - - - 3,991 3,991
Write offs (1,327) (1,327)
Disposal - - (77) - (77)
Transfers - - 1,565 (1,565) -
Exchange rate
movement - - 28 - 28
---------- -------------------- ------------------ ------------------- -------
At 29 January 2022 3,781 617 62,026 2,667 69,091
Amortisation
At 30 January 2021 3,781 617 27,320 - 31,718
Charge for the
period - - 8,970 - 8,970
Disposal - - (47) - (47)
Exchange rate
movement - - 29 - 29
---------- -------------------- ------------------ ------------------- -------
At 29 January 2022 3,781 617 36,272 - 40,670
---------- -------------------- ------------------ ------------------- -------
Net book value
At 29 January
2022 - - 25,754 2,667 28,421
========== ==================== ================== =================== =======
At 30 January
2021 - - 33,190 1,568 34,758
========== ==================== ================== =================== =======
Reacquired Key money Computer Computer software Total
right software under development
-------------------- ---------- --------- --------- ------------------ ------------------------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 25 January 2020 3,781 617 55,607 2,879 62,884
Additions - - - 3,692 3,692
Transfers - - 5,057 (5,057) -
Exchange rate
movement - - (154) 54 (100)
---------- --------- --------- ------------------ ------------------------------
At 30 January 2021 3,781 617 60,510 1,568 66,476
----------
Amortisation
At 25 January
2020(1) 2,035 - 13,885 - 15,920
Charge for the
period 1,746 - 13,509 - 15,255
Impairments - 653 - - 653
Exchange rate
movement - (36) (74) - (110)
---------- --------- --------- ------------------ ------------------------------
At 30 January 2021 3,781 617 27,320 - 31,718
---------- --------- --------- ------------------ ------------------------------
Net book value
At 30 January 2021 - - 33,190 1,568 34,758
========== ========= ========= ================== ==============================
At 25 January
2020 1,746 617 41,722 2,879 46,964
========== ========= ========= ================== ==============================
Amounts included within computer software relate to the Group's
information technology and ERP systems and further development of
our eCommerce platforms and other business systems. The computer
software under development category is stated net of transfers to
computer software. Transfers from the computer software under
development category in the period amounted to GBP1.6m (2021:
GBP5.1m) while additions into this category were GBP4.0m (2021:
GBP3.7m).
9. Property, Plant and Equipment
Freehold Leasehold Fixtures, Motor Assets Total
land and improvements fittings vehicles under
buildings and office construction
equipment
--------------- ---------- ------------- ----------- --------- ------------- --------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 30 January
2021 - 115,751 96,684 109 849 213,393
Additions - 5 775 - 2,761 3,541
Transfers - 37 1,269 - (1,306) -
Write offs - (5) (44) - - (49)
Disposals - (2,785) (3,880) - - (6,665)
Exchange rate
movement - 641 (730) - - (89)
---------- ------------- ----------- --------- ------------- --------
At 29 January
2022 - 113,644 94,074 109 2,304 210,131
---------- -------------
Depreciation
At 30 January
2021 - 88,510 85,373 109 - 173,992
Charge for the
period - 5,409 5,738 - - 11,147
Write offs - - (315) - - (315)
Disposals - (2,785) (3,258) - - (6,043)
Impairment - 381 780 - - 1,161
Exchange rate
movement - 259 (270) - - (11)
---------- ------------- ----------- --------- ------------- --------
At 29 January
2022 - 91,774 88,048 109 - 179,931
---------- ------------- ----------- --------- ------------- --------
Net book value
---------- ------------- ----------- --------- ------------- --------
At 29 January
2022 - 21,870 6,026 - 2,304 30,200
========== ============= =========== ========= ============= ========
At 30 January
2021 - 27,241 11,311 - 849 39,401
========== ============= =========== ========= ============= ========
Freehold Leasehold Fixtures, Motor Assets Total
land and improvements fittings vehicles under
buildings and office construction
equipment
--------------- ---------- ------------- ----------- --------- ------------- --------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 25 January
2020 57,973 126,687 104,871 111 1,524 291,166
Additions - - - - 3,289 3,289
Transfers - 212 3,774 - (3,986) -
Write offs - (3,240) (3,988) - - (7,228)
Disposals (57,973) (6,369) (7,976) (2) - (72,320)
Exchange rate
movement - (1,539) 3 - 22 (1,514)
---------- ------------- ----------- --------- ------------- --------
At 30 January
2021 - 115,751 96,684 109 849 213,393
---------- -------------
Depreciation
At 25 January
2020(1) 1,827 84,441 82,060 108 - 168,436
Charge for the
period 192 7,554 5,111 - - 12,857
Write offs - (3,037) (3,866) - - (6,903)
Disposals (2,019) (6,281) (2,703) 1 - (11,002)
Impairment - 7,142 5,001 - - 12,143
Exchange rate
movement - (1,309) (230) - - (1,539)
---------- ------------- ----------- --------- ------------- --------
At 30 January
2021 - 88,510 85,373 109 - 173,992
---------- ------------- ----------- --------- ------------- --------
Net book value
At 30 January
2021 - 27,241 11,311 - 849 39,401
-----------
At 25 January
2020 56,146 42,246 22,811 3 1,524 122,730
===========
Details on the impairment of property, plant and equipment are
shown in the annual report & accounts.
10. Deferred Tax Assets and Liabilities
As at 29 January Asset /(liability) (Charge)/ (Charge)/ Foreign Asset/
brought forward credit Credit to exchange (liability)
to Income Equity on retranslation carried
Statement forward
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Deferred tax asset
on UK operations arising
from:
Assets
Share-based payments 144 374 (5) - 513
UK tax losses 4,782 7,948 (345) - 12,385
Other 402 (52) - - 350
Derivative financial
instruments 70 - (56) - 14
Property, plant and
equipment 252 2,275 - - 2,527
Total deferred tax
asset on UK operations 5,650 10,545 (406) - 15,789
Deferred tax asset
on foreign operations
arising from:
Foreign losses 4,850 1,190 - 103 6,143
Inventory 1,347 (1,039) - 30 338
Property, plant and
equipment 1,643 (644) - 39 1,038
IFRS 16 6,729 (1,536) - 31 5,224
Other 2,547 430 - 3 2,980
State taxes 4,869 (1,252) - 58 3,675
Total deferred tax
asset on foreign operations 21,985 (2,851) - 264 19,398
Deferred tax liability
on foreign operations
arising from:
IFRS 16 - (80) - - (80)
Net deferred tax asset/(liability)
on foreign operations 21,985 (2,931) - 264 19,318
Total deferred tax
asset/(liability) 27,635 7,614 (406) 264 35,107
At 29 January 2022, the net deferred tax asset of GBP35.1m
(2021: GBP27.6m) comprises a deferred tax asset of GBP35.2m (2021:
GBP27.6m) and a deferred tax liability of GBP0.1m (2021: GBP
nil).
Recognition of deferred tax assets is based on the generation of
future taxable profits that will allow utilisation of the asset.
Future taxable profits are forecast by jurisdiction and the
associated tax charge calculated to ensure the recoverability of
the deferred tax asset.
Deferred tax assets are only recognised on the foreign assets
when these businesses pass their development phase and when
management considers it probably that future taxable profits will
be available against which they can be utilised.
The total unused cumulative tax losses for which no deferred tax
asset has been recognised in the balance sheet is GBP19.9m (2021:
GBP16.9m). GBP1.7m of losses will expire in 0-5 years, GBP3.3m of
losses will expire in 6-10 years, and GBP14.9m of losses have no
expiration date.
Company Deferred Tax Assets and Liabilities
As at 29 January Asset /(liability) (Charge)/ (Charge)/ Asset/
brought forward credit Credit to (liability)
to Income Equity carried
Statement forward
GBP'000 GBP'000 GBP'000 GBP'000
Deferred tax asset:
UK tax losses 1,100 538 - 1,638
Total 1,100 538 - 1,638
11. Inventories
Group Group
29 January 30 January
2022 2021
GBP'000 GBP'000
Raw materials and packaging 2,458 1,960
Work in progress 614 657
Finished goods and goods for resale 99,999 85,231
103,071 87,848
Cost of inventories recognised as an
expense within cost of sales during the
period 163,880 156,444
The write back of inventory to fair value less cost of sales for
the 52 weeks to 29 January 2022 was GBP3.9m (2021: write down of
GBP11.1m).
Inventories written down and recognised as an expense in the
period relates to inventory written down to the net realisable
value and the net movement in inventory provisions during the
period. The write down and any reversal are included in cost of
sales. For further details on inventory valuation, key assumptions
and sensitivities, see the annual report & accounts.
12. Trade and Other Receivables
Group Group Company Company
29 January 30 January 29 January 30 January
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
Trade receivables 33,403 34,366 - -
Prepayments and accrued
income 23,257 10,300 66 -
Other taxes and social
security - - - -
56,660 44,666 66 -
Included in prepayments and accrued income are accrued income
amounts of GBP2.0m (2021: GBP1.1m) in relation to licensing income
which has not yet been invoiced.
Amounts owed from joint ventures is GBP4.5m (2021: GBP4.3m) of
which GBP3.6m is owed from Ted Baker (Hong Kong) Limited (2021:
GBP3.6m). These amounts are fully recoverable.
Expected credit losses
The Group measures the loss allowance for trade receivables at
an amount equal to lifetime expected credit losses ('ECL'). The ECL
on trade receivables are estimated with reference to past default
experience of the debtor and an analysis of the debtor's current
financial position, adjusted for factors that are specific to the
debtor, general economic conditions of the industry in which the
debtor operates and an assessment of both the current as well as
the forecast direction of conditions at the period end date. There
has been no change in the estimation techniques or significant
assumptions made during the current reporting period. The Group has
credit insurance and standby letters of credit in place with
several customers to mitigate exposure against customer credit
risk.
The Group provides for a trade receivable when there is
information indicating that the debtor is in severe financial
difficulty and there is no realistic prospect of recovery, e.g.
when the debtor has been placed under liquidation or has entered
bankruptcy or administration proceedings. The Group debtor
provision at 29 January 2022 amounted to GBP0.6m (2021:
GBP0.5m).
At the year end, the Group has one customer with an outstanding
debtor balance equal to approximately 13.0% of the total
outstanding balance. Having assessed the customer and reviewed the
aging of the outstanding debt, the balance is not seen as a greater
credit risk to the Group than other debtors.
The table below shows the credit risk exposure on the Group's
trade receivables at 29 January 2022:
Carrying Current Overdue Overdue Overdue Overdue
amount amount 1-30 31-60 61-90 90+days
GBP'000 GBP'000 days days days GBP'000
GBP'000 GBP'000 GBP'000
Gross carrying amount - trade
receivables 33,973 21,779 7,937 530 672 3,055
Loss allowance (570) (72) - - (65) (433)
Net carrying amount 33,403 21,707 7,937 530 607 2,622
The Group has no significant concentrations of credit risk. The
amounts owed by Group undertakings balance comprises an interest
free intercompany loan with a subsidiary within the Group, which is
repayable on demand. The ability of the Group undertaking to repay
outstanding balances to the Company is assessed at each reporting
date and counterparty credit risk is reviewed on a regular basis
using the IFRS 9 expected credit loss impairment model. If a
significant increase in the credit risk occurs, credit losses are
recorded in the income statement. As at 29 January 2022, and at 30
January 2021, the expected credit loss of the Company's trade and
other receivables was negligible and hence no impairment of the
receivable was recorded.
13. Trade and Other Payables
Group Group Company Company
29 January 30 January 29 January 30 January
2022 2021 Restated(1) 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
Trade payables(1) 46,200 60,574 - -
Accruals and deferred
income 7,808 8,726 147 112
Other creditors 11,906 8,665 - -
Other tax 10,979 8,864 - -
------------------
76,893 86,829 147 112
(1) More details of the restatement are found in Note 2.
14. IFRS 16
Right-of-use assets
The Group has applied IFRS 16 using the simplified modified
retrospective transition approach.
Right-of-use assets are recognised in relation to the Group's
leases, representing the economic benefits of the Group's right to
use the underlying leased assets. The Group's lease portfolio is
principally comprised of property leases of stores, UK and overseas
head offices and distribution centres.
The Group has applied the practical expedient for the
application of rent concessions provided as a response to the
Covid-19 pandemic, as allowed by the amendment to IFRS 16.
Right-of-use asset 29 January 30 January
2022 2021
Cost GBP'000 GBP'000
Opening 181,544 188,219
Gross adjustment(1) - (2,019)
Modifications (2,569) (9,179)
Additions 3,631 9,229
Disposals (12,656) (4,706)
Closing 169,950 181,544
Amortisation
Opening (99,785) (50,232)
Gross adjustment(1) - 2,019
Modifications (450) -
Charge for the period (16,621) (26,763)
Disposals 12,252 4,706
Impairments(2) (1,827) (29,515)
Closing (106,431) (99,785)
Net book value 63,519 81,759
(1) Gross adjustment between cost and amortisation brought
forward to better reflect underlying gross split.
(2) Impairments in the year of GBP1.8m consisted of the interim
impairment of GBP2.1m, the year-end impairment of GBP0.5m, and a
release of GBP0.8m relating to modifications impacting the prior
year.
Lease liabilities
When measuring lease liabilities, the Group discounted lease
payments using its incremental borrowing rate upon transition to
IFRS 16 and at subsequent remeasurement dates. The discount rates
applied range between 2.0% to 9.1%, they have been determined based
on comparable bond yields and are lease-specific varying by
territory and lease length.
Amounts recognised in profit or loss
Group Group
29 January 30 January
2022 2021
GBP'000 GBP'000
Interest on lease liabilities (1) 4,949 6,781
(1) Expenses related to variable rental payments for leasehold
properties are included within Note 4.
Lease liabilities included in the statement of financial
position
Group Group
29 January 30 January
2022 2021 Restated(1)
GBP'000 GBP'000
Current 43,129 45,063
Non-current 81,805 106,617
Total lease liabilities 124,934 151,680
(1) More details of the restatement are found in Note 2.
Reconciliation of liabilities to cash flow arising from
financing activities:
Group Group
29 January 30 January
2022 2021 Restated(1)
GBP'000 GBP'000
Opening 151,680 168,337
Modifications(1) 1,082 (807)
Changes from financing cash
flows:
Payment of lease liabilities (34,765) (24,517)
Remeasurement - (361)
Total changes from financing
cash flows (33,683) (25,685)
Increase in lease liability 3,632 2,509
Disposal of lease liabilities (1,545) -
The effect of changes in foreign
exchange rates (99) (262)
Interest expense 4,949 6,781
Total other changes 6,938 9,028
124,934 151,680
(1) Modifications includes GBP0.5m reduction of interest for the
year due to modifications made to IFRS 16 leases.
Maturity analysis - contractual undiscounted cash flows
Group Group
29 January 30 January
2022 2021 (Restated(1)
)
GBP'000 GBP'000
Less than one year 32,657 34,536
One to five years 74,903 96,481
More than five years 17,988 29,067
125,548 160,084
(1) More details of the restatement are found in Note 2
15. Related Parties
The Group considers its Executive and Non-Executive Directors,
together with the Executive Team as key management and their
compensation therefore comprises a related-party transaction.
Total compensation in respect of key management for the period
was as follows:
52 weeks ended 53 weeks ended
29 January 30 January
2022 2021
GBP'000 GBP'000
Salaries, fees and short-term
benefits 3,849 3,297
Contributions to money purchase
pension schemes 127 57
Share-based payment (credit)/charges - -
3,976 3,354
Directors of the Company as at 29 January 2022 and their
immediate relatives control 0.2% of the voting shares of the
Company.
Amounts due from/to the Company's subsidiaries are shown
below:
52 weeks ended 53 weeks ended
29 January 30 January
2022 2021
GBP'000 GBP'000
Amounts due from No Ordinary Designer
Label Limited 123,753 119,672
Amounts due to No Ordinary Shoes - -
Limited
Sales to and amounts due from/to the Group's joint ventures are
shown below:
52 weeks ended 53 weeks ended
29 January 30 January
2022 2021
GBP'000 GBP'000
Amounts due from No Ordinary Retail
Company Pty 576 372
Sales to No Ordinary Retail Company
Pty 1,918 1,261
Amounts due from Shanghai LongShang
Trading Company Ltd 3,929 3,933
Sales to Shanghai LongShang Trading
Company Ltd 3,636 2,876
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR FIFLAEIIRFIF
(END) Dow Jones Newswires
May 26, 2022 05:19 ET (09:19 GMT)
Ted Baker (LSE:TED)
Historical Stock Chart
From Jun 2024 to Jul 2024
Ted Baker (LSE:TED)
Historical Stock Chart
From Jul 2023 to Jul 2024
