Ted Baker’s revenue decreased 1.4% to £630.5 million (US$792.3 million) for the year ended January 25, 2020, down 2.4% in constant currency, driven by a 4.6% decrease in retail sales to £439.9 million (US$552.4 million), a 14.1% decrease in licence income to £19 million (US$23.86 million), offset by a 9.6% increase in wholesale sales to £171.5 million (US$215.4 million). The Group’s underlying gross margin was lower at 55.6% (2019: 59.8%), with the retail margin of 59.9% (2019: 63.1%) and wholesale margin of 39.8% (2019: 44.1%) both significantly lower than the prior year. Ted Baker said the difficult trading environment resulted in lower margins, primarily due to an “unprecedented and sustained level of promotional activity across the sector, with distressed discounting from some brands and retailers, and heightened competition”. The wholesale gross margin was further impacted by the annualised effect of the acquisition of the footwear business which carries a lower gross margin, according to the British fashion Group, which signed an agreement with Pentland Group to acquire No Ordinary Shoes Limited and No Ordinary Shoes USA LLC in September 2018. Read more here.

Retail sales in the UK and Europe decreased by 5.7% to £296.9 million (US$373.6 million) as a result of the “deeply challenging external retail environment”. E-commerce sales also decreased 3.5% to £94.6 million (US$119 million); as a percentage of UK and Europe retail sales, e-commerce sales represented 31.9% of the total. Sales in North America were up 3.3% to £129.8 million (US$163.3 million). In October 2019, the Group entered into a joint venture agreement with Shanghai LongShang Trading Company, where they would acquire 50% of our existing business to further develop the brand in China, including Hong Kong and Macau. The joint venture is expected to drive the long-term growth of Ted Baker in these markets.

As Ted Baker’s loss before tax in the year amounted to £79.9 million (US$119.4 million) compared with a £30.7 million (US$38.56 million) profit in the prior year, founder Ray Kelvin has reduced his stake in the company from 35% to 15.8% as part of an emergency £105 million (US$132 million) fundraising. The company raised £95 million (US$119.6 million) through a share placing and launched a £10 million (US$12.5 million) offer for subscription. Profit before tax and non-underlying items and IFRS 163 in the year totalled £9.8 million (US$12.3 million), down from £63 million (US$79.14 million) in 2019. Investment firm Toscafund is reported to have used the share listing to nearly double its stake to 26.4%.