Ted Baker needs longer-term casualwear and e-tail focus - analyst
Ted Baker blamed the pandemic for much of the sales plunge it saw in Q4, but an analyst thinks that even after the pandemic is over, it needs to reduce its reliance on the core categories that have proved a turn-off during the crisis and to make more casual categories a focus of its marketing.
The company usually sells a lot of occasionwear, outerwear and suits, but didn’t do much of that during the crucial Christmas quarter.
GlobalData retail analyst Pippa Stephens believes a strategy re-think is in order.
“Despite Ted Baker’s transformation programme being well underway, the retailer is yet to see a material benefit from these investments, with Q4 FY2020/21 revenue plummeting by almost half,” she said. “Its reliance on occasionwear was a hindrance during the quarter, as the category drastically fell out of favour among consumers due to the cancellation of Christmas parties and events. While occasionwear will regain some appeal once Covid-19 restrictions are lifted, Ted Baker’s strong focus on formalwear may continue to dent sales, as the long-term trend of home working will result in a slower category rebound”.
Importantly, she added that while Ted Baker has already increased the mix of casualwear and loungewear within its proposition, “these ranges are still relatively unknown to consumers, so Ted Baker must improve its marketing of these products via social media and influencer collaborations to drive awareness among shoppers”.
A quick look at its Instagram account shows a heavy focus on outerwear with plenty of dresses too.
She also believes the company has plenty of work to do to improve its online sales.
"While Covid-19 measures resulted in the temporary closure of the majority of its UK estate during Q4, as well as restrictions across many of Ted Baker’s international markets, the retailer failed to recover sales online, with revenue via its own online operations increasing by only 2%,” she explained. “This is despite consumers’ rapid shift to purchasing fashion online during the pandemic, so the relaunch of its website, due at the end of Q1 FY2021/22, could not come soon enough”.
As for the 1% decline in Ted Baker branded merchandise sold online through third-party e-tailers, Stephens feels the company could boost this by offering more exclusives to its partners.
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