Annual Results

19 March 2015

Ted Baker PLC

("Ted Baker", the "Group")

Annual Results for the 53 weeks ended 31 January 2015

Highlights:

· Group revenue up 20.4% to £387.6m

· Retail sales up 18.4% to £306.9m

o UK and Europe retail sales up 16.7% to £231.8m

o US and Canada retail sales up 24.9% to £63.3m

o E-commerce sales up 58.2% to £36.7m

· Wholesale sales up 28.5% to £80.7m

· Licence income up 31.2% to £11.7m

· Proposed final dividend of 29.0p bringing total dividend to 40.3p an increase of 19.6%

Ray Kelvin CBE, Founder and Chief Executive, said:

"This was another excellent year as we continued to develop Ted Baker as a leading lifestyle brand across global markets and distribution channels.

We continue to invest in the brand as we develop in new markets where we see long term growth. All the while, we remain totally focused on the quality, design and attention to detail which underpins every area of the Group.

Our customers' reaction to our Spring/Summer collections across markets has been very encouraging and we are excited by our new store openings in the coming months, which include a first store devoted to showcasing our extended licence product range in Spitalfields, London.

The strength and success of the Ted Baker brand is testament to the skill, talent and 'Tedication' of our team across the world, and I would like to take this opportunity to thank them for their hard work and 'pashion' during the year. We look forward with continued confidence as we further develop Ted Baker globally."

www.tedbaker.com

www.tedbakerplc.com

Media images available for download at:

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 that operates through three main distribution channels: retail, which includes e-commerce; wholesale; and licensing, which includes territorial and product licences.

The brand has grown steadily from its origins as a single shirt specialist store in Glasgow to the global lifestyle brand it is today. We distribute through our own and licensed retail outlets, leading department stores and selected independent stores in Europe, North America, the Middle East, Asia and Australasia.

Ted Baker has 398 stores and concessions worldwide, comprising of 183 in the UK, 83 in Europe, 75 in the US and Canada, 50 in the Middle East and Asia and 7 in Australasia.

The brand offers a wide range of collections including: Menswear; Womenswear; Global; Phormal; Endurance; Accessories; Lingerie and Sleepwear; Childrenswear; Fragrance and Skinwear; Footwear; Neckwear; Eyewear; Watches; Luggage; Audio and Homewear.

Chairman's Statement

I am pleased to report another strong year in the global development of the Ted Baker brand. We delivered a strong performance across all channels and territories during the 53 weeks to 31 January 2015 (the "period"), resulting in a 20.4% increase in Group revenue to £387.6m (2014: £321.9m) (22.5% in constant currency) and a 23.7% increase in profit before tax and exceptional items to £49.5m (2014: £40.0m).

The retail division performed well, delivering an increase in revenue of 18.4% to £306.9m (2014: £259.1m) (20.8% in constant currency) on an increase in average square footage of 9.3%. Performance across our established territories was strong and we continue to invest in our newer markets and build brand awareness for the long term development of the brand. We have continued our geographic expansion with openings across all territories and successfully migrated our US e-commerce site onto our new platform in July 2014, following the launch of the new UK site in the prior year.

Wholesale sales for the Group increased by 28.5% to £80.7m (2014: £62.8m) (29.8% in constant currency), reflecting a good performance from our UK wholesale business, which includes the supply of goods to our licensed stores and our export business, as well as a strong performance from our North American wholesale business.

Licence income from our territorial and product licences increased by 31.2% to £11.7m (2014: £8.9m). During the period, our licence partners opened stores in Abu Dhabi, Dubai, Saudi Arabia, Panama and Turkey and our joint venture in Australasia opened a further two stores.

We continue to invest in our infrastructure and successfully launched the first phase of the Microsoft Dynamics AX business system at the start of February 2015, as planned. We will continue to roll out this system globally across the Group over the next year to enhance the efficiency of the business, streamline our operations and support our long term growth strategy.

Financial Results

Group revenue for the period rose by 20.4% to £387.6m (2014: £321.9m). The composite gross margin decreased to 60.7% (2014: 61.7%), mainly as a result of a change in sales mix between wholesale and retail sales and partly due to a slight decrease in the retail and wholesale margins.

Profit before tax and exceptional items increased by 23.7% to £49.5m (2014: £40.0m) and profit before tax increased by 25.3% to £48.8m (2014: £38.9m). Adjusted basic earnings per share, which exclude exceptional items, increased by 20.6% to 83.2p (2014: 69.0p) and basic earnings per share increased by 22.0% to 82.0p (2014: 67.2p).

Exceptional costs in the period of £5.3m (2014: £1.0m) relate to a legal dispute with a previous insurer, details of which were previously disclosed in the prior year annual accounts.

Exceptional income for the period of £4.7m (2014: £nil) is comprised of £3.7m in relation to the early termination of a licence agreement and £1.0m relating to a settlement of an intellectual property dispute.

The Group's net borrowing position at the end of the period was £18.8m (2014: £8.8m). This reflected the on-going significant investment in capital expenditure during the year and increased inventory in line with the Group's growth. The estimated net borrowing position at the end of week 52 was £15.4m (2014: £8.8m).

Dividends

The Board is recommending a final dividend of 29.0p per share (2014: 24.2p), making a total for the year of 40.3p per share (2014: 33.7p per share), an increase of 19.6% on the prior period. Subject to approval by shareholders at the Annual General Meeting to be held on 12 June 2015, the final dividend will be paid on 19 June 2015 to shareholders on the register on 22 May 2015.

People

I would like to take this opportunity to thank all of my colleagues across the world for their continued commitment and contribution. This strong performance is testament to our talented teams, whose creativity and passion are key to our success as we continue to grow the business and develop Ted Baker as a global lifestyle brand.

Current Trading and Outlook

Retail

Our retail business has started the new financial year well, and we are encouraged by the positive reaction to our Spring/Summer collections. We continue to develop Ted Baker in the UK with store openings planned in Stansted and in Spitalfields, London, which will showcase our licenced product range.  We will further develop our e-commerce site to enhance customer experience and advance the local content provided to our European customers, including language options specific to key countries. In Europe, we plan to open a new store in Amsterdam, our first Spanish outlet in Barcelona and further concessions, in France, Germany, the Netherlands and Spain during the year.

In North America, our growth will continue with the opening of four new stores and three outlets, a relocation of our store in Los Angeles and further concessions through a leading department store. Our new US e-commerce site is proving successful following its launch in July 2014, delivering improved design, performance and personalised content. Towards the end of 2014, we launched our Canadian e-commerce site and are pleased by its performance at this early stage.

In Asia, we remain focused on building brand awareness in this market where we are in the relatively early stages of development. We are opening our first street level store in Hong Kong at the end of April and further concessions in China and South Korea.

Wholesale

Our wholesale business is delivering a strong performance that is in line with our expectations. We anticipate further growth across our wholesale businesses, which should result in high single digit growth in sales in the coming year.

Licence Income

Our product and territorial licences continue to perform well, with further openings planned in Azerbaijan, Dubai, Egypt, Saudi Arabia, Singapore, Taiwan and Thailand in the new financial year.

Group

The Group continues to perform well in a competitive trading environment and we remain focused on the long term development of the brand globally. Further openings are planned across all of our markets. In our newer markets, where we are investing for the longer term, we are working to further enhance brand awareness.

We continue to invest in people and infrastructure to support the future growth of Ted Baker. The Group is well positioned to deal with the challenges and opportunities ahead, particularly during the implementation of the new Microsoft Dynamics AX business systems across the Group. While there will be an element of additional costs while we run down our existing systems, we will continue to monitor and control associated costs. Capital expenditure in the new financial year is anticipated to be at the same level as last year at some £26m, due to further store openings and the on-going investment in new systems across the business.

We intend to make our next interim management statement, covering trading since the start of the financial year, in mid June 2015.

David Bernstein CBE

Non-Executive Chairman

19 March 2015

Strategic Report

Business Model and Strategy

Ted Baker is a global lifestyle brand that operates through three main distribution channels: retail, which includes e-commerce; wholesale; and licensing, which includes territorial and product licences.

The brand has grown steadily from its origins as a single shirt specialist store in Glasgow to the global lifestyle brand it is today. We distribute through our own and licensed retail outlets, leading department stores and selected independent stores in Europe, North America, the Middle East, Asia and Australasia.

We offer a wide range of collections including: Menswear; Womenswear; Global; Phormal; Endurance; Accessories; Lingerie and Sleepwear; Childrenswear; Fragrance and Skinwear; Footwear; Neckwear; Eyewear; Watches, Luggage, Audio and Homewear.

Our strategy is to become a leading global lifestyle brand, based on three main elements:

Underlying our strategy is an emphasis on design, product quality and attention to detail, which is delivered by the passion, commitment and skill of our teams, licence partners and wholesale customers ("trustees").

Key Performance Indicators

We review the on-going performance of the business using key performance indicators for our global business and each of our distribution channels.

These have been detailed below and considered further throughout the strategic report.

*Operating contribution is defined as operating profit before exceptional items as a percentage of revenue.

**Excludes licensed partner stores

*** Excludes online sales

**** Operating cashflow per share is defined as net cash generated from operating activities divided by the weighted number of ordinary shares (diluted)

***** Working capital comprises inventories, trade and other receivables and trade and other payables.

Business Review

Global Group Performance

Retail

Ted Baker operates stores and concessions across the UK, continental Europe, North America and Asia and an e-commerce business based in the UK, primarily serving the UK and Europe, with separate US and Canadian websites dedicated to the Americas. We also have e-commerce businesses with some of our concession partners.

The retail division performed well with sales up 18.4% (20.8% in constant currency) to £306.9m (2014: £259.1m). Average retail square footage rose by 9.3% over the period to 332,089 sq ft (2014: 303,951 sq ft). Total retail square footage at 31 January 2015 was 344,898 sq ft (2014: 316,648 sq ft), an increase of 8.9% on the prior year. Retail sales per square foot rose 4.4% (6.6% in constant currency) from £780 to £814.

The performance of our e-commerce business was strong and sales increased by 58.2% to £36.7m (2014: £23.2m) driven by growth across all areas of our e-commerce business. Our UK site continues to benefit from the re-launch of our UK platform in late 2013, providing a more relevant customer experience through improved design, performance and personalised content. This was followed by the successful migration of our US site in July 2014 and we are pleased with its performance.

The retail gross margin reduced slightly to 65.5% (2014: 66.1%), largely reflecting an increase in our outlet sales as a proportion of total sales. Retail operating costs increased 17.4% in line with our expectations to £143.5m (2014: £122.2m) and as a percentage of retail sales, decreased slightly to 46.8% (2014: 47.1%).

Wholesale

We currently operate a wholesale business in the UK serving countries across the world, particularly in Europe, as well as supplying products to our licensed stores. In addition, we operate a wholesale business in North America.

Group wholesale sales increased by 28.5% (29.8% in constant currency) to £80.7m (2014: £62.8m), reflecting a good performance from both our UK wholesale business, with sales increasing by 25.3% to £64.9m (2014: £51.8m), and our North American wholesale business, with sales increasing by 39.1% (45.0% in constant currency) to £15.3m (2014: £11.0m) as the brand continues to gain traction.

Gross margins were down from last year at 42.4% (2014: 43.4%), which was principally the result of a greater proportion of wholesale sales to our licensed stores, which carry a lower margin.

Licence income

We operate both territorial and product licences. Our territorial licences cover Europe, South America, the Middle East, Asia and Australasia, where our partners operate licensed retail stores and in some territories, wholesale operations. Our product licences cover fragrance and skinwear, watches, footwear, eyewear, men's suits, neckwear, jewellery, childrenswear, lingerie and sleepwear, homeware, luggage and audio.

Licence income was up 31.2% to £11.7m (2014: £8.9m), with both territorial and product licences performing well. There were notable performances from our product licencees in footwear, eyewear, neckwear, skinwear and lingerie. In September, we opened our first store in Panama with our licence partner and we are encouraged by performance so far. Our licensed stores in the Middle East, operated by our territorial partner, RSH Limited, also performed particularly well during the period with further openings planned as a result.

Collections

Ted Baker Womenswear delivered a good performance with sales up 22.6% to £219.3m (2014: £178.9m). Womenswear benefited from a greater proportion of new space added during the period and as a result represented 56.6% of total sales (2014: 55.6%).

Ted Baker Menswear performed well with sales up 17.7% to £168.3m (2014: £143.0m). Menswear represented 43.4% of total sales in the period (2014: 44.4 %).

Geographic Performance

United Kingdom and Europe

* Excludes licensed partner stores

** Excludes online sales

Sales in our UK and Europe retail division were up 16.7% to £231.8m (2014: £198.6m) (17.8% in constant currency), reflecting a good performance in our established UK market and a very good performance in continental Europe where we continue to expand.

In the UK we opened new stores during the year in Glasgow, Heathrow Terminal 2, Heathrow Terminal 4 and relocated our Birmingham store. We closed our store in Heathrow Terminal 1 due to the closure of the terminal and closed one further store. Our European expansion continued as we opened a new store in Marseille and a new outlet in Paris, France. We also opened further concessions with premium department stores in France, Portugal, Spain and the Netherlands. We are pleased with their performances and remain positive about growth opportunities for the brand in these markets. We also opened a further store with our licence partner in Istanbul, Turkey.

Our e-commerce business performed very well during the period with sales increasing by 54.2% to £33.3m (2014: £21.6m), reflecting continuing growth in the UK.

Sales from our UK wholesale division increased by 25.3% to £64.9m (2014: £51.8m) reflecting a good performance from our UK wholesale business, including the supply of product to our licensed stores, and continued growth in our wholesale export business.

North America

* Excludes licensed partner stores

** Excluding online sales

We are very pleased with our progress across the retail and wholesale channels in North America both of which performed very well and we are confident that the Ted Baker brand is continuing to gain traction and recognition in this territory.

Sales from our retail division increased by 24.9% to £63.3m (2014: £50.7m) (31.3% in constant currency). During the period we continued our expansion in North America with new stores in Las Vegas, Miami, Philadelphia and Toronto, an outlet in Desert Hills, California, and six further concessions through a leading department store.

Our e-commerce business delivered a strong performance, following the successful migration of our US e-commerce website onto our new platform in July 2014 with sales increasing 115.7%.

Our licencee successfully launched our first store in Panama.

Sales from our North American wholesale business increased by 39.1% to £15.3m (2014: £11.0m) (45.0% in constant currency) reflecting the continued growth of our business.

Middle East, Asia and Australasia

* Excludes licensed partner stores

We continue to develop the Ted Baker brand across Asia, Australasia and the Middle East through our retail and licensing channels. We work closely with our territorial partners to ensure the visual merchandising of the licensed stores and training of the teams is reflective of the Ted Baker culture.

In Asia we remain encouraged by reactions to the brand and whilst we still remain in the relatively early stages of development, we are positive about the long term opportunities in this territory. Retail sales in Asia increased 19.2% to £11.8m (2014: £9.9m) (26.1% in constant currency). In China, we opened a further outlet store. In Japan, we opened two concessions through a leading department store and closed one. In South Korea, we opened one concession and closed two concessions.

During the period, our Middle East licence partners opened further stores in Abu Dhabi, Dubai, Egypt and three in Saudi Arabia, and all are performing very well. As at 31 January 2015, our licence partners operated 34 stores and concessions across the rest of the world. (2014: 28).

The joint venture with our Australasian licence partner Flair Industries Pty Ltd continues to perform well, during the period, we opened two new stores in Brisbane and Melbourne, Australia. As at 31 January 2015, we operated 7 stores in Australasia (2014: 5 stores).

Financial Review

Revenue and Gross Margin

Group revenue increased by 20.4% to £387.6m (2014: £321.9m), driven by an 18.4% increase in retail sales to £306.9m (2014: £259.1m) and a 28.5% increase in wholesale sales to £80.7m(2014: £62.8m).

The composite gross margin for the Group decreased to 60.7% (2014: 61.7%) mainly as a result of a change in sales mix between wholesale and retail sales.

Operating Expenses Pre-Exceptional items

Distribution costs increased by 17.3% in line with our expectations to £144.6m (2014: £123.2m) and as a percentage of sales decreased to 37.3% (2014: 38.3%).

Administration expenses increased by 17.6% to £51.0m (2014: £43.4m). Excluding the employee performance related bonus of £4.9m (2014: £3.9m), administration expenses rose by 16.7% due to our growth in central functions, both in the UK and overseas, and the continued deployment of our distribution and information technology infrastructures to support our growth.

Profit Before Tax

Profit before tax and exceptional items increased by 23.7% to £49.5m (2014: £40.0m) and profit before tax increased by 25.3% to £48.8m (2014: £38.9m).

Exceptional items

Exceptional income for the period of £4.7m (2014: £nil) comprises £3.7m in relation to the early termination of a licence agreement and £1.0m in relation to the settlement of an intellectual property dispute. The early termination relates to the mutual agreement in February 2014 to terminate a licence agreement earlier than anticipated due to a variation in that licence partner's long-term strategy following a change in senior management.

Exceptional costs for the period of £5.3m (2014: £1.0m) relate to a legal dispute with a previous insurer. The Group received a judgement in October 2014 that its claim against this previous insurer for loss of profit arising from the theft of inventory from its warehouse from 2004 to 2008 had not been upheld by the court. In line with accounting standards, a full provision has been made for all costs incurred and judged payable by the Company.

The prior year's exceptional costs of £1.0m included £0.7m for impairment charges in respect of a retail store in the Meatpacking District, New York and a retail store in Paris, both locations failed to deliver on their potential. The balance of £0.3m relates to an onerous lease for our retail store in Liverpool, where we ceased trading following the expansion of our Liverpool One Store in Merseyside.

Finance Income and Expenses

Net finance costs payable during the period were £1.2m (2014: £1.1m). This increase reflects higher Group borrowing compared to the prior year as a result of the on-going significant investment in capital expenditure and increased working capital to support our long-term expansion.

The net foreign exchange loss during the year of £0.3m (2014: a gain of £0.1m) was due to the retranslation of monetary assets and liabilities denominated in foreign currencies.

Taxation

The Group tax charge for the year was £12.9m (2014: £10.1m), an effective tax rate of 26.5% (2014: 25.9%). This effective tax rate is higher than the UK tax rate for the period of 21.32% largely due to higher overseas tax rates and the non-recognition of losses in overseas territories where the businesses are still in their development phase. On 1 April 2014, the UK corporation tax rate fell from 23% to 21% and will fall to 20% from 1 April 2015. Our closing deferred tax assets and liabilities have therefore been measured at this rate.

Our future effective tax rate is expected to be higher than the UK tax rate as a result of overseas profits arising in jurisdictions with higher tax rates than the UK.

53rd Week Impact

The inclusion of an additional week does not have a material impact on profit before tax for the period, but does mean that inventories include an additional week of Spring/Summer intake compared to the previous year. The net borrowing position at the end of the period includes a quarterly payment of VAT, which is payable on 31st January each year and usually falls in the first week of a new financial year. Excluding the impact of the additional week would reduce net borrowings by £3.4m.

Cash Flow

The net decrease in cash and cash equivalents of £10.1m (2014: £1.7m increase) primarily reflected an increase in working capital and further capital expenditure to support our long term development.

Total Group working capital, which comprises inventories, trade and other receivables and trade and other payables, increased by £21m to £90.9m (2014: £69.9m). This was mainly driven by an increase in inventories of £30.7m to £111.1m (2014:£80.4m) reflecting the growth of our business, stock on hand for our wholesale customers and licence partners and an additional £6m of Spring/Summer intake due to the 53rd week.

Group capital expenditure amounted to £25.7m (2014: £18.1m) reflecting the opening and refurbishment of stores, concessions and outlets, investment in business wide systems to support our future growth and a new e-commerce platform for the US site.

The Group's net borrowing position at the end of the period was £18.8m (2014: £8.8m) and the estimated position at the end of week 52 was £15.4m (2014: £8.8m).

Shareholder Return

Basic earnings per share increased by 22.0% to 82.0p (2014: 67.2p).Adjusted earnings per share, which exclude net exceptional items, increased by 20.6% to 83.2p (2014: 69.0p).

The proposed final dividend of 29.0p per share will make a total for the period of 40.3p per share (2014: 33.7p per share), an increase of 19.6% on the previous year.

Operating cash flow per share, which is calculated using the net cash generated from operating activities, was 68.7p (2014: 73.1p) and reflected a decrease in cash generated from operating activities.

Currency Management

The most significant exposure to foreign exchange fluctuation relates to purchases made in foreign currencies, principally the US Dollar and the Euro.

A proportion of the Group's purchases are hedged in accordance with the Group's risk management policy, typically 12 months in advance. The balance of purchases is hedged naturally as the business operates internationally and income is generated in the local currencies.

At the balance sheet date, the Group had hedged its projected commitments in respect of the year ending 30 January 2016.

Borrowing Facilities

In September 2014, the Group increased its borrowing facility to £65.0m (2014: £50.0m). The facility is a multi-currency revolving credit facility with The Royal Bank of Scotland and Barclays which is due to expire on 1 March 2018. The increase is a function of the growth in our business and is necessary to fund capital expenditure to support the Group's long term strategy.

The facilities contain appropriate financial covenants and are tested on a quarterly basis. The Group monitors actual and prospective compliance with these on a regular basis.

Cautionary statement regarding forward-looking statements

This document contains certain forward-looking statements. These forward-looking statements include matters that are not historical facts or are statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Company's results of operations, financial condition, liquidity, prospects, growth, strategies, and the industries in which the Company operates. Forward-looking statements are based on the information available to the directors at the time of preparation of this document, and will not be updated during the year. The directors can give no assurance that these expectations will prove to be correct. Due to inherent uncertainties, including both economic and business risk factors underlying such forward-looking information, actual results may differ materially from those expressed or implied by these forward-looking statements.

Principal Risks and Uncertainties

The Board recognises there are a number of risks and uncertainties that face the Group. The Board and subsidiary directors (the "Executive Committee") have established a structured approach to identify, assess and manage these risks and this is regularly monitored and updated by the Risk Committee. The Risk Committee includes the Chief Operating Officer and various subsidiary directors and heads of department. Although not exhaustive, the following list highlights some of the principal risks which are not shown in order of importance:

Group Income Statement

For the 53 weeks ended 31 January 2015

Group Statement of Comprehensive Income

For the 53 weeks ended 31 January 2015

Group Statement of Changes in Equity

For the 53 weeks ended 31 January 2015

Group Statement of Changes in Equity

For the 52 weeks ended 25 January 2014

Company Statement of Changes in Equity

For the 53 weeks ended 31 January 2015

Company Statement of Changes in Equity

For the 52 weeks ended 25 January 2014

Group and Company Balance Sheet

At 31 January 2015

Group and Company Cash Flow Statement

For the 53 weeks ended 31 January 2015

Notes to the Financial Statements

1. Basis of preparation

EU law (IAS Regulation EC 1606/2002) requires that the Group financial statements, for the 53 weeks ended 31 January 2015 are prepared in accordance with International Financial Reporting Standards (IFRSs) adopted for use in the EU ("adopted IFRSs").

This financial information has been prepared on the basis of the recognition and measurement requirements of adopted IFRSs as at 31 January 2015. The financial information set out above does not constitute the Group's statutory accounts for the 53 weeks ended 31 January 2015 or 52 weeks ended 25 January 2014. The annual financial information presented in this annual results announcement for the 53 weeks ended 31 January 2015 is based on, and is consistent with, that in the Group's audited financial statements for the 53 weeks ended 31 January 2015, and those financial statements will be delivered in May 2015. The auditor's report on those financial statements is unqualified and does not contain any statement under Section 498 (2) or (3) of the Companies Act 2006.

Statutory accounts for 25 January 2014 have been delivered to the registrar of companies. The auditors' have reported on those accounts; their reports were i) unqualified and, ii) did not contain statements under Section 498 (2) or (3) of the Companies Act 2006.

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out on pages 3 to 10. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the Chairman's Statement on pages 3 to 4. In addition the financial statements include the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.

The company meets its day-to-day working capital requirements through an overdraft facility which was renewed on 29 September 2014, increasing the Group's committed borrowing facility from £50m to £65m for the 3.5years to March 2018. The Group's forecasts and projections, taking into account reasonably possible changes in trading performance, show that the Group has sufficient financial resources. As a consequence the Directors have a reasonable expectation that the Company and the Group are well placed to manage their business risks and to continue in operational existence for the foreseeable future. Accordingly, the Directors continue to adopt the going concern basis in preparing the consolidated financial statements.

Non-GAAP performance measures

The directors believe that the profit before exceptional items and adjusted earnings per share measures provide additional useful information for shareholders on the underlying performance of the business. These measures are consistent with how underlying business performance is measured internally.

The exceptional profit before tax measure is not a recognised profit measure under IFRS and may not be directly comparable with adjusted profit measures used by other companies.

Exceptional items in the current year include:

· costs in relation to a legal dispute with a previous insurer;

· income for an early termination of a licence partner agreement; and

· the receipt for a settlement of an intellectual property dispute.

Exceptional items in the prior year include:

· An impairment charge in respect of two retail stores; one in the New York's Meatpacking district, and one in Paris.

· An onerous lease in relation to a retail store in Liverpool we were no longer trading due to store relocation. This space was sub-let until expiry of the lease.

Significant accounting policies

Except as described below, the accounting policies applied by the Group in this annual results announcement are the same as those applied by the Group in its consolidated financial statements for the 52 weeks ended 25 January 2014.

There were no revisions to adopted IFRS that became applicable in the period which had a significant impact on the Group's financial statements.

The Group does not consider that any other standards, amendments or interpretations issued by the IASB, but not yet applicable, will have a significant impact on the financial statements in future years.

2. Segment information

The Group has three reportable segments; retail, wholesale and licence income.

For each of the three segments, the Group's chief operating decision maker (the "Board") reviews internal management reports on a four weekly basis.

The accounting policies of the reportable segments are the same as described in note 1 on pages 21 to 22. 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 licence segment is measured based on royalty income, as included in the internal management reports that are reviewed by the Board.

Segment results before exceptional 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

Wholesale sales are shown after the elimination of inter-company sales of £54,541,000 (2014: £38,397,000).

b) Geographical information

*Non-current assets exclude deferred tax assets.

c) Revenue by collection

3. Profit before tax

Exceptional income for the period of £4.7m (25 January 2014: £nil) comprises £3.7m in relation to the early termination of a licence partner agreement and £1.0m in relation to the settlement of an intellectual property dispute. The early termination relates to the mutual agreement in February 2014 to terminate our licence agreement earlier than anticipated due to a variation in that licence partner's long-term strategy following a change in senior management.

Exceptional costs for the period of £5.3m (25 January 2014: £1.0m) relate to a legal dispute with a previous insurer. The Group received a judgement in October 2014 that its claim against a previous insurer for loss of profit arising from the theft of inventory from its warehouse from 2004 to 2008 had not been upheld by the court. In line with accounting standards, a full provision has been made for all costs incurred and judged payable by the Company.

The exceptional costs of £1.0m incurred during the 52 weeks to 25 January 2014 included £0.7m of impairment charges in respect of the retail assets of a store in the Meatpacking district, New York and a store in Paris, both of which locations had failed to deliver on their potential. The balance of £0.3m relates to an onerous lease for one of our Liverpool based stores, where we have ceased trading following the expansion of our Liverpool One store in Merseyside.

4. Finance income and expenses

5. Income tax expense

a) The tax charge comprises

b) Deferred tax movement by type

c) Factors affecting the tax charge for the period

The tax assessed for the period is higher than the tax calculated at domestic rates applicable to profits in the respective countries. The differences are explained below.