Fashion retailer Ted Baker’s has performed better than expected, showing further signs of recovery under its new chief executive, sending its shares up by 13%.
The company was struggling before the coronavirus crisis, hit by a string of profit warnings, management changes and an accounting scandal since founder Ray Kelvin stepped down as CEO last year after misconduct allegations, which he denies.
Ted Baker, known for its suits, shirts, and dresses with quirky details, said online sales were significantly ahead of expectations and that increased social media engagement and targeted digital marketing had stimulated sales, in line with new CEO Rachel Osborne’s transformation plan.
“The scale of progress made under the new management team has been truly extraordinary,” Liberum analysts said. “The delivery against very clear targets and more immediate milestones highlights a clear direction from the new management team.”
As part of a turnaround, Ted Baker said previously announced job cuts are expected to save £12m (€13.2m) in the current financial year, while spending has been restricted to less than £10m for the 2021 financial year.
Online sales, which have climbed to 69% of total retail sales from 25% last year, jumped 35% for the 11 weeks to July 18, Ted Baker said.
Ted Baker, which had reopened 95% of its stores by the end of last week, said group revenue for the 11-week period was down 55% year on year at £60.9m, beating a base-case scenario provided last month.
Ted Baker said it will continue to withhold forecasts for the financial year to January 30.
Meanwhile, Britain’s Royal Mail said it had shipped 117 million more parcels in the June-ended quarter than last year, as people and businesses shifted to online sales during the coronavirus-led lockdown.
The company has had a turbulent few years with union resistance to a restructuring plan as letter volumes fall. The global health crisis has exacerbated its woes, bringing forward the need to align strategies to parcels and logistics.
Parcel volume growth of 38% and growth of 22% at its international ground-based parcel network, GLS, and other trends were similar to those seen earlier in the year, the company said, as part of updates it plans to provide during the Covid-19 pandemic.
Royal Mail reiterated it has been in talks with its largest trade union to settle a long-running dispute over pay and operational changes that include thousands of layoffs.