14th Nov 2013 15:45
LONDON (Alliance News) - British clothing and accessories retailer Ted Baker PLC Thursday said that revenues rose significantly in the third quarter, driven by new space and a strong performance across the business, particularly in the UK and North America.
It said the strong performance was meeting its own expectations, but cautioned that its full-year results will be dependent on trading during the key Christmas period.
"It's a bit early to call, but I am expecting a good Christmas. I don't see it being a tough Christmas, and with a slightly positive economic backdrop that helps," Chief Financial Officer Lindsay Page told Alliance News after it released its third quarter trading statement.
Page said that the group is not increasing promotional activity past normal levels for this time of year. The company said it has seen an encouraging response to its Autumn/Winter collections across all of its international markets.
Ted Baker reported group revenues of GBP77.1 million in the third quarter ended November 9, a 24% increase on the GBP62.0 million a year earlier. It said that retail sales rose 20% to GBP58.1 million, helped by an 11% increase in new retail space.
Page said that within its established markets, the UK and North America are showing strong growth.
Ted Baker has only opened a limited number of stores in the UK over the last three years, and that is set to continue as the company focuses on overseas expansion, Page said.
"In terms of significant growth opportunities, we are really encouraged by Europe, especially Spain, France and the Netherlands"
The group recently announced plans for further concessions in the Netherlands, France, Spain, and an outlet in Belgium.
Further afield, Ted Baker said it will be opening another store in Hong Kong during the fourth quarter, and has three store openings planned through its licence partners, two in the Middle East and one in Turkey.
The retailer said it plans to double the number of stores in China, as its hopes Chinese consumers will jump on the affordable luxury bandwagon.
"It's still very early stages. We are still earning about the Chinese market, and establishing ourselves. We will spend time getting to grips with the market before we push on, and we are not expecting to open any more stores there in the next 12 months," Page told Alliance News.
The CFO said that the group's supply and distribution chain is already set up to scale for such expansion plans. Ted Baker's clothes are produced in China and Europe, principally Italy, Portugal and Turkey.
The company's online business continues to perform well, having launched its new UK e-commerce platform at the end of the third quarter. Page said the online business currently accounts for around 8% of overall sales, but expects it to rise to double-digit figures over the next few years.
Ted Baker will use the new system to operate all of its international websites from one platform, paving the way for digital launches in Australia, New Zealand and the US in the middle of next year, followed by Europe in 2015.
"(The platform) is more readily clone-able for single language sites and currencies for particular territories", Page said.
In its half-year results, Ted Baker said that womenswear represented 57.8% of total sales, up from 55.7% a year earlier. Page said that he expects this trend to continue in the short term.
"Obviously the womenswear market is bigger, and it is also benefiting more from our new space. However we will get to a point when we will start opening some men concessions, so it should normalise at some point," Page added.
Ted Baker shares were up 5% Thursday afternoon, at 1,879.00 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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