Ted Baker sales plummet 50% despite surge in eCommerce

Ted Baker has reported a 35% year-on-year surge in online sales amid a substantial fall in revenue overall for the 11-week period from 3 May to 18 July 2020. The trading update comes after reports emerged this weekend that the luxury fashion retailer plans to cut around a quarter of its workforce because of the Covid-19 pandemic.

With consumers continuing to shift online during the crisis, Ted Baker revealed that eCommerce represented 69% of its total retail sales in the 11 weeks; this compares to just 25% in the same period last year.

But total retail sales plunged by 50%, and store revenue by 79% in the period. This is despite 75% of the Ted Baker store estate across US, UK and Europe being operational for the last four weeks.

First reported by the Sunday Times at the weekend, it is expected that the fashion retailer will shortly announce 500 job cuts across its head office and stores as it looks to make its business more sustainable.

Last month, Ted Baker unveiled a new strategy shaped by a “digital first” mentality, which is expected to focus on critical systems such as an upgraded eCommerce platform and a new payment service provider gateway.

Rachel Osborne, CEO at Ted Baker commented: "I am pleased with the early progress we have made in driving operational excellence and cost efficiencies since the launch of Ted's Formula for growth in June. Our customers are engaging with the brand and responding to our Covid-19 promotional activity, as evidenced by our resilient trading over the past 11 weeks.

“Our performance is encouraging, but I caution that it is still early days, and we have a substantial amount of work to do over the next 12 months against a backdrop of significant uncertainty in the world. However, the brand has an exciting future, and I am looking forward with cautious optimism that the initiatives currently underway across all areas of the business will bear fruit over the next 12 months."