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Gross margins in line with expectations - Ted Baker

17
Jun '09
Ted Baker, the British designer brand is pleased to announce a 7.6% increase in Group revenue for the 19 week period from 1 February 2009 to 12 June 2009, compared to the same period last year, with gross margins in line with expectations.

Retail sales for the period were 15.2% above the same period last year and average retail square footage rose by 17.1% over the period to 202,206 sq.ft.(2008: 172,696 sq.ft.). Our performance in the UK has been better than anticipated, although trading conditions in our overseas markets remain challenging. However, we continue to take advantage of opportunities that arise and are pleased to announce that we will be opening a new store in Boston in October and a new outlet store in Orlando at the end of this month.

As highlighted at the time of our annual results on 25 March 2009, wholesale sales for the period were 15.7% below the same period last year and we believe this trend will continue throughout the remainder of this year. The current economic environment is resulting in difficult trading conditions for some of our wholesale customers. Wholesale sales also continue to be affected by further transfers of some wholesale accounts to retail concessions, our decision to focus the childrenswear business on licensed product and the closure of certain accounts, no longer appropriate for our brand.

Our product and territorial licences continue to trade in line with expectations, with the exception of our licensed partner for North America, Hartmarx Corporation, which filed for protection under Chapter 11 of the US Bankruptcy code in January 2009. As previously reported, we do not expect these actions to have a material financial effect on our business.

At this early stage in the year the Board remains confident that full year results will be in line with expectations. However, due to the anticipated reduction in wholesale sales, the subsequent change in balance within our turnover will lead to a significant shift in the phasing of profit from the first half to the second half of the year.

Commenting on trading, Ray Kelvin, Founder and Chief Executive, said: "The economic environment remains uncertain, however, we remain confident that the strength of the Ted Baker brand coupled with our resilient multi-channel distribution strategy and sound balance sheet will enable the Group to weather this difficult environment.

We have taken action to ensure our costs and commitments remain controlled and in line with the trends we anticipate for 2009 but will continue to invest carefully in the development of the brand where appropriate to support long term growth."

TED BAKER PLC


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