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Bosses at high street fashion chain Ted Baker have said they will be relying less on heavy promotions and focusing on trying to sell more clothes at full price under a recovery plan.
The retailer said the strategy has seen online sales fall as a result but managers remain unconcerned as the business recovered strongly following the end of Covid-19 restrictions in most regions.
Sales in the 16 weeks to August 14 rose 50% compared with the same period a year ago – when stores were closed for some of the time during the first national lockdowns.
But these remain below pre-Covid levels, with store sales down 45% on the same period in 2019. Online sales fell 25% compared with a year ago.
Bosses were upbeat however, revealing that sales in the last four weeks have been particularly impressive and grown substantially as shoppers return to stores.
Much of the growth came from out-of-town and shopping centre sites, with city centres remaining subdued, the company added.
A focus on improving profits over sales by having fewer promotions saw profit margins increase by 5%.
The company said: “Re-establishing our premium positioning has meant moving away from the aggressive promotional stance in (the second quarter) last year, negatively impacting the sales performance of e-commerce relative to last year.”
But hopes of a recovery in online sales were dented, as bosses revealed that “technical aspects” of its new website have “taken longer than expected to fully resolve”.
With Christmas trading coming up, bosses said they would delay the launch until early next year to avoid any problems during the peak season, although they added that this will not have a “material” impact on performance on its online business.
We have made encouraging progress
Rachel Osborne, Ted Baker
Chief executive Rachel Osborne said: “We have made encouraging progress, with trading over the second quarter in line with expectations, albeit the speed of recovery is different across store locations and regions.
“Full-price sales mix has significantly improved across all our retail channels as we continue to re-establish our premium lifestyle brand positioning.”
She added: “It is still early days in the recovery, but we are confident that Ted is starting to emerge from Covid a stronger and more resilient business.”