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Dress to Impress: Ted Baker Says Formal Wear Back in Demand

Shoppers walk past a Ted Baker store on Regents Street in London, Britain December 17, 2018. (Reuters)
Shoppers walk past a Ted Baker store on Regents Street in London, Britain December 17, 2018. (Reuters)
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Dress to Impress: Ted Baker Says Formal Wear Back in Demand

Shoppers walk past a Ted Baker store on Regents Street in London, Britain December 17, 2018. (Reuters)
Shoppers walk past a Ted Baker store on Regents Street in London, Britain December 17, 2018. (Reuters)

Upmarket retailer Ted Baker said on Monday dresses and suits were back in demand, with Britons rediscovering a taste for formal wear as months of COVID-19 curbs on social life were slowly relaxed.

A lockdown-driven shift to casual wear hammered the fashion retailer's earnings last year, but its new boss said the performance of Ted Baker stores since their reopening in April was "very pleasing".

"Most recently we are seeing dresses back to the same level (in the) mix of our business as it was two years ago," Rachel Osborne told Reuters. "(We) are seeing people coming in for suits, the wedding season is hopefully starting."

Ted Baker shares were up 1.2% at 0754 GMT after the group reported a 59.2 million pound ($83.53 million) pretax loss for the 12 months to Jan. 30, narrower than the 76-million-pound loss forecast by analysts, according to Refinitiv Eikon data.

Osborne, who took over last year, has been working on winning back customers and investor trust after a string of setbacks that followed the departure of previous chief executive and founder Ray Kelvin following misconduct allegations.

Kelvin has denied any wrongdoing.

The company, which cut nearly 1,000 jobs and raised money through a stock issue to get through the crisis, is undergoing a three-year turnaround plan focused on saving 31 million pounds a year.

It also plans to strengthen its online presence, with 11 million pounds earmarked for its e-commerce site's revamp.

"Ted Baker needs to find a way to sustainably improve its online business, or it won't bode well for trading patterns in the post-pandemic, digital-centric world," Hargreaves analyst Sophie Lund-Yates said.

While overall sales slumped by 44% to 352 million pounds in fiscal 2021, online sales leapt 22%, though growth slowed to 4.5% in the first quarter of the current year with fewer discounts and other promotions.

Osborne said the company had also introduced more casual wear, such as joggers and sleepwear, for lockdown times. "All those really took off as a percentage mix of our business that we hadn't seen pre-COVID."

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Fashion

Nike's New CEO Plans to Go Back to Basics in Brand Overhaul Effort

The Nike swoosh logo is seen outside the store on 5th Ave in New York, New York, US, March 19, 2019. (Reuters)
The Nike swoosh logo is seen outside the store on 5th Ave in New York, New York, US, March 19, 2019. (Reuters)
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Nike's New CEO Plans to Go Back to Basics in Brand Overhaul Effort

The Nike swoosh logo is seen outside the store on 5th Ave in New York, New York, US, March 19, 2019. (Reuters)
The Nike swoosh logo is seen outside the store on 5th Ave in New York, New York, US, March 19, 2019. (Reuters)

Nike's new CEO Elliott Hill warned of a long road to sales recovery for the sportswear giant, but the veteran executive's plan to turn the spotlight on sports like basketball and running, allayed some investor worries.

The company said on Thursday it was expecting third-quarter revenue to drop to low double digits after the embattled sportswear seller's quarterly results beat market estimates.

Hill, in his first public address as CEO on the post-earnings call, said Nike had "lost its obsession with sport" and vowed to put it back on track by refocusing on sport and selling more items at premium prices, Reuters reported.

"The recovery is going to be a multi-year process, but he(Hill) seems to be going back to the roots, back to Nike being Nike," said John Nagle, chief investment officer at Kavar Capital Partners, which owns Nike shares.

"(Hill plans to shift focus) away from some of the streetwear and fashion that had taken over the brand, the heavy discounting and the neglect of retailers. Just taking it back to what worked," Nagle said.

Hill, who was with Nike for more than three decades, returned as CEO in October to revive demand at the firm that has been struggling with strategy missteps that soured its relations with retailers such as Foot Locker.

Earlier this month, Foot Locker CEO Mary Dillon said Hill was "taking the right actions for the brand" and the retailer was "working closely" with Nike to emphasize newer sportswear styles, including Vomero and Air DT Max.

"(The retailers) they want us to get back to being Nike, and they want us to have the unrelenting flow of innovative products... and they want us to get back to delivering bold brand statements that help drive traffic," Hill said.

The company's market share dwindled as rival brands, including Roger Federer-backed On and Deckers' Hoka , lured consumers with fresher and more innovative styles.

Hill also highlighted that a lack of newness led Nike to become too promotional and said he plans to shift to selling more at full price on its website and app.

"With another half year of franchise management coupled with investment to reinvigorate the brand, we believe the next four quarters could be the worst of the margin erosion and earnings per share reductions," Barclays analyst Adrienne Yih said.

At least seven brokerages cut price targets on the stock with some analysts pointing to the lack of a clear timeline for Nike to return to growth.

Shares of Nike, which have lost about half of its value in the last three years, were down nearly about 2% in early trading on Friday.

Nike's forward price-to-earnings ratio for the next 12 months, a benchmark for valuing stocks, was 27.53, compared with 33.47 for Deckers and 32.32 for Adidas.

"A rudderless ship now has a rudder, and a sailor who knows how to drive it," said Eric Clark, portfolio manager at the Rational Dynamic Brands fund that owns Nike shares.