Ted Baker (LON: TED) has reported deeper losses for the first half of the year.
Operating losses before tax fell from £23m a year ago to £86.4m in the six months ended 8 August.
Group revenue fell 45.9% to £169.5m whilst sales plunged 42.2% during the period to £124m amid the pandemic.
The retailer has blamed the pandemic for Covid-related costs and the lack of sales during the enforced store closures.
“Our financial statements for the first half of the year do not yet reflect the progress
we have made on execution against our strategic plan. Progress made to date,
despite the challenges caused by COVID, have allowed us to fix our foundations.
We cannot fix all our problems overnight and due to the nature of our lead times, we
still expect that it will take another 12-18 months for the hard work and effort of
hundreds of people internally to become visible to our customers and consequently
improved financial results. I am encouraged by how much the team has achieved
in the first six months of the year and we’re delivering against all our operational
KPIs for the current financial year and remain on track to deliver our medium-term
targets,” said the Ted Baker chief executive in a statement.
“We are behind where we want to be on revenue. A slow recovery in consumer
demand due to COVID, the latest round of government lock-down measures and
the well-publicised heavy discounting online across global markets by many of our
peers has led to many of our shops closing for a second time, severely impacted
footfall into city centres and a heightened level of promotional activity.
“This has also impacted our margins and we have taken additional inventory provisions at the half
to reflect the impact of COVID. We have worked hard to offset these shortfalls
through cost savings and here we are ahead of our plans. Higher cost savings and
the ongoing tight control of cash have resulted in a far stronger balance sheet than
we envisaged this early in the plan, with significant cash balances and liquidity to
see us through the COVID crisis and beyond. Despite reporting material operating
losses as expected this year, underlying free cash flow will be positive for the year.
I am extremely pleased to see this level of agility in our cash management.”