Yahoo Finance Ted Baker shares soar as sales rebound after Omicron hit
British luxury fashion brand Ted Baker (TED.L) posted a rise in overall and full-price sales despite the effects of the Omicron variant and supply chain woes during the Christmas season.
Sales increased 35% year-on-year in the three months from 7 November 2021 to 29 January this year. This was up 18% on the previous quarter.
Both in-store and online retail sales were 10% below pre-COVID levels before the Omicron warnings and fell to 42% below pre-pandemic levels during the latest surge in infections.
Britons were advised to work from home in the period Ted Baker's sales jumped. UK prime minister Boris Johnson has since fully lifted the restrictions, aimed at curbing the spread of the Omicron variant.
The group forecast it will meet its financial targets for the year ahead in its latest earnings call.
Ted Baker's line of Womenswear, bags, footwear and tops, sold particularly well alongside a successful home and bedding product expansion in the US.
The retailer's chief executive Rachel Osborne heralded a strong improvement in the brand’s trading margin as "Ted re-establishes its premium brand positioning".
Osborne said "the strong improvement in trading margin is encouraging" after its move to full price sales.
Shares in the company rose 16.2% on the news on Wednesday morning in London.
Ted Baker has nearly 400 locations mostly in the UK, Europe and North America.
Under Osborne the group is more than halfway through a three-year plan to focus on cost cutting and boosting its online presence and product range.
The fashion brand has set its sight on the US for expanding its home and bedding product licence with home retailer Bedeck from July. It has also extended its Jack Victor licence for North America for another five years.
It has also signed a franchise agreement in the UK which will see three new stores opening each year for the next three years.
The group said it had successfully navigated the global supply chain disruptions which were sparked by the pandemic, but admitted that there had been a "modest impact" on the availability of some products.
Read more: UK taxpayers to lose £15bn to COVID fraud in government schemes
The results come after data released last week showed UK retail sales grew faster than anticipated in January. Figures from the Office for National Statistics (ONS) suggest that inflation has not massively impacted consumer spending yet, with the volume of goods sold online and in-store rising 1.9% and providing a much-needed rebound from the Omicron induced 4% knock in December.
But, experts expect consumers to tighten their purse strings in the coming months as inflation is set to peak at 7%, and households face higher energy bills and tax rises in April.
“Retailers will be acutely aware that the cost of living squeeze could see consumers scrutinising their spending more over the coming weeks and months, impacting trade,” said Paul Martin, UK head of retail at KPMG.
“As is the case for consumers, retailers also face inflationary pressures. Businesses have challenging decisions to make about how to absorb those, or how to pass them on without losing custom.”
Watch: How does inflation affect interest rates?
