LONDON, United Kingdom — British fashion retailer Ted Baker's has performed better than expected, showing further signs of recovery under its new chief executive, sending its shares up as much as 16 percent.
The company was struggling before the coronavirus crisis, hit by a string of profit warnings, management changes and an accounting scandal since founder Ray Kelvin stepped down as chief executive last year after misconduct allegations, which he denies.
Ted Baker, known for its suits, shirts and dresses with quirky details, said online sales were significantly ahead of expectations and that increased social media engagement and targeted digital marketing had stimulated sales, in line with new Chief Executive Rachel Osborne's transformation plan.
"The scale of progress made under the new management team has been truly extraordinary," Liberum analysts said. "The delivery against very clear targets and more immediate milestones highlights a clear direction from the new management team."
As part of a turnaround, Ted Baker said previously announced job cuts are expected to save 12 million pounds ($15.2 million) in the current financial year and 27 million pounds on an annualised basis, while spending has been restricted to less than 10 million pounds for the 2021 financial year.
Online sales, which have climbed to 69 percent of total retail sales from 25 percent last year, jumped 35 percent for the 11 weeks to July 18, Ted Baker said.
The company's shares rose 16 percent on the news before paring gains. By 08.21 am GMT the shares were up 9.3 percent at 77.6 pence.
Ted Baker, which had reopened 95 percent of its stores by the end of last week, said group revenue for the 11-week period was down 55 percent year on year at £60.9 million pounds, beating a base-case scenario provided last month.
Ted Baker said it will continue to withhold forecasts for the financial year to January 30.
By Tanishaa Nadkar; editors: Shounak Dasgupta and David Goodman