Fashion sales rebound as workers return to offices

Ted Baker operates concessions in Arnotts and Brown Thomas outlets in Ireland, along with two standalone stores in Dublin and Kildare.

Fashion chain Ted Baker said sales were rebounding as office and party wear become popular again after the lifting of Covid-19 restrictions, but signalled the pace of recovery was still uncertain.

Ted Baker and other clothing retailers are navigating a bumpy road back to normal as demand for office and party wear grows again, but anaemic levels of tourism in places such as London had hurt store footfall.

"We are optimistic but we're also being reasonably cautious on outlook in the next quarter and the next year," chief executive Rachel Osborne said in an interview. "For us, a full return to international tourism would really help the bounce-back."

Ted Baker, which has 377 stores and concessions with three-quarters of those located in the United Kingdom, Europe and North America, said demand for formal wear, suiting and occasion wear pushed group revenue up 18% year-over-year in the 28 weeks to August 14. The company operates concessions in Arnotts and Brown Thomas outlets in Ireland, along with two standalone stores in Dublin and Kildare.

The firm said loss before tax narrowed to £25.3m (€29.5m) from £86.4m (€100.9m) a year earlier.

The rising number of Covid-19 vaccinations in Europe and North America has encouraged many workers to return to their offices, with Ted Baker's revenue from North America jumping by a third. Customers looking ahead to parties and the Christmas season were also helping, Osborne said.

Burberry sales flatlined

The positive sales for Ted Baker were countered by results from Burberry, another UK fashion chain.

The trenchcoat maker said sales flatlined in the second quarter due to bad weather and Covid-19 travel restrictions in China, taking the shine off the fashion brand's better-than-expected profit.

Shares in the company fell as much as 10% in early trading, giving up the gains it has made since mid-October after it reported flat like-for-like second-quarter store sales compared to two years ago, before the pandemic struck.

Chief financial officer Julie Brown said footfall in China dropped in August but it recovered in September and October was in line with expectations.

China is Burberry's biggest market, and growth in the country, along with South Korea and the United States, drove its revenue to pre-pandemic levels in the first half of its financial year.

Worries about the strength of China's economy and an initiative to redistribute wealth, named "common prosperity" by President Xi Jinping, have hit the luxury sector.

• Reuters