Retailer Ted Baker has seen shares jump higher as the group hailed “resilient” trading after a better-than-feared sales hit from the coronavirus crisis.
The fashion chain revealed store sales crashed 79% in the 11 weeks to July 18, but online trading jumped by 34% on a constant currency basis, helping lessen the overall impact and sending shares soaring as much as 17% higher.
Ted Baker said revenues fell 55% overall to £60.9 million in the 11 weeks, which was better than the lockdown impact it had pencilled in last month.
The update comes just days after it was revealed Ted Baker plans to axe at least 500 jobs, or more than a quarter of its UK workforce.
This is on top of the 160 job losses announced by the retailer in February as part of a turnaround plan after a grim 2019 for the firm.
Ted Baker, which now has 95% of stores trading globally after a phased reopening since lockdowns, said online sales now make up 69% of total retail sales, up from 25% a year ago.
While online has performed “significantly” better than expected, according to the group, it only partially offset the impact on stores from the lockdown.
Though Ted Baker had been braced for store sales to plummet 83% in its base case scenario.
Rachel Osborne, chief executive of Ted Baker, said: “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.”
The group confirmed that its cost savings, including the job cuts across, will save around £27 million a year, with around £12 million due in the current financial year.
The coronavirus crisis has come after an already difficult time for Ted Baker, which last year saw shares dive after a profit warning and the resignation of founder Ray Kelvin following allegations of misconduct, including “forced hugging”.
In January, bosses then said Ted Baker’s stock inventory had been overstated by £58 million, almost three times worse than the company had previously estimated.
It outlined a new transformation strategy following a review of its costs by advisory firm AlixPartners.
Ted also turned to investors in a £105 million cash-call in June to help support it through the pandemic