TED Baker, retailer analysis report PDF

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Analysis of Ted Baker, one of the main premium fashion brand in UK. ...

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TED BAKER ® REPORT Marzia Marini w169622351 Fashion Business 4FAMN010W

Content Introduction ................................................................................................................................ 3 Company description ................................................................................................................. 5 Retail Performance..................................................................................................................... 6 Pestel .......................................................................................................................................... 8 Market Position ........................................................................................................................ 10 Pen Portrait............................................................................................................................... 12 Store Evaluation ....................................................................................................................... 13 Website review......................................................................................................................... 15 Swot analysis ........................................................................................................................... 17 Conclusion .............................................................................................................................. 18 Bibliography ........................................................................................................................... 19

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Introduction Ted Baker is one of the UK’s fastest growing leading lifestyle brands (ww.tedbakerplc.com, 2018). This report has the aim to illustrate and analyse Ted Baker company. This report examines its current economical performances, season and market conditions and their impact on the retailer, its position in the fashion market, affinities and differences with its competitors, online offer and website design. To do this, it was necessary gathering information from online website, as Global market, Market Line, Edited and Ted baker Plc website, and fashion online sources, as Business of Fashion and Drapers. Meanwhile, a store evaluation and a pen portrait has been conducted through a physical trip in three different store:, Ted’s UK flagship store in regent Street, London; Ted store, White City one, Westfield, London and Ted concession in John Lewis, Oxford Street, London. Finally, it provides some recommendations based on a critical review of the retailer focusing on its internal strengths and weaknesses and external opportunities and threats.

Since its foundation, as a single shirt specialist in Glasgow in 1988 Ted Baker has seen a constant growth. Today, Ted Baker “worth more than £700m” ( Graham Ruddick, 2013, Telegraph) with a broad product range that include: menswear, womenswear, 3

childrenswear, formalwear, accessories, lingerie, sleepwear, fragrances, skinwear, footwear, neckwear, eyewear and watches ( tedbakeplc, 2018). It counts 544 stores , concessions and outlets in more than 35 countries all around the world (Vogue, 2013): 201 in the UK; 116 in Europe; 129 in North America; 89 in the Middle East, Asia and Africa; and 9 in Australasia (Tedbakerplc ). Ted Baker is know fondly for its attention to detail, quality and unique, yet commercial fashion offering (Tedbakerplc ). These elements create the distinctive Ted Baker personality that is the reason of the title of ‘No Ordinary Designer Label’. “The company has succeeded not despite his unique style, but because of it. His quirkiness, passion and rebellious style runs through everything that Ted Baker does” said Graham Ruddick (Telegraph, 14 October 2013). To summarize this report has been written with the purpose to make a critical review of Ted Baker, attempting to provide a general idea of its organisation, values and strategies.

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Company description Ted Baker is a public limited company whose aim is to became a “leading global lifestyle brand” (Tedbakerplc ). The company is based in London: the head office, renowned as The Ugly Brown Building, is 6a St Pancras Way, Camden Town, London. The UK’s flagship store is 245 Regent Street (Tedbakerplc ). The share value is £1,511 (Tedbakerplc, 12 October 2018) and the company is listed on the London Stock Exchange. Lindsay Page is currently acting as chief executive officer, after Rey Kelvin, founder and official CEO of the retail, announced to take a leave of absence due to an allegation of harassment. (The Guardian, 7 December 2018).. Ted Baker strategy is based on three main elements: an ever-expanding collection in order to forecast and react promptly to new trends, and enhance its offer. Secondly, a distribution through three main channels: retail, including e-commerce, wholesale and licensing; and finally a continued expansion in both existing and new territories. In fact, this year Ted Baker has opened 7 new stores and outlets in the United Kingdom, United States, Spain, Germany and France while it has bought licensees in India, Kazakhstan, Malaysia, Mexico, Singapore, Taiwan and Ukraine (Tedbakerplc, 2018), (Drapers, Jill Geoghegan, October 2018).

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Retail performance Over the last five years the retail has reported a steady growth. In fact, according to table n.1, realised by the data available on the company website, since the begging of 2014 the retailer has almost doubled its performances. The revenue raised from 321,92 to 591,67, while the profit after tax, the gross profit and the earning per share increased by about 80 %.

Regarding the fiscal period terminated on 27 January 2018, table n.2 shows that sales revenue increased up to 11.4% and, even though retail is the major channel of the company, the sales in retail reported a lower increase than both wholesale and licence sales. In particular, licensees performed very well thanks to a growth demand of childrenswear, eyewear, skinwear and suiting (Tedbakerplc, 22 March 2018).

One of the reason of these positive performance it is the Ted Baker strategy of expanding in new territories. In fact, table n.3 shows that sales in the rest of World grew of 19.7 % exceeding the percentage change of the sales in the UK and North America. In addiction, the growth of sales in North America illustrates increased brand recognition in foreign countries. (Tedbakerplc, 22 March 2018).

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Nevertheless, the sales in the UK and Europe remain significantly higher than the others confirming that United Kingdom and Europe are the principal markets for Ted Baker. In 2018, Ted Baker continues to increase but its performances report a noticeable slowdown. The Interim Results Announcement for the 28 weeks ended 11 August 2018 published by Ted Bakar company on their web site on 4 October 2018, shows in the period from 11 August 2017 to 12 August 2018 that the sales revenue increased only by 3,5%. Ray Kelvin stated external trading conditions are the

Table n.2 “Income by channel”

the reason of this slowdown. (Drapers, Jill Geoghegan, October 2018).

In addiction, the recent scandal involving Ray Kelvin and his hugging policy worsened the struggling situation. In fact, it was the main cause of the dramatic share value drop on Monday 3 December, when Ted Baker shares tumbled to a three-year low, £1,420.00 (bbc.co.uk, 3 December 2018) . In order to better understand the cause of Ted Baker current situation a PESTEL analysis has been introduced.

Table n.3 “Revenue by territory”

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Pestel Politics – The departure of the United Kingdom from the European Union is undeniably one of the “biggest events in recent British history” (Will Martin, 26 July 2018, Business Insider) and it has a huge impact the United Kingdom fashion industry. Firstly, it led to a period of economic uncertainty that discouraged investments in Britain brands. In addiction, the British Fashion Council warned that losing the automatic EU protection against intellectual property means that British designers will have to register their designs across a portfolio, and this procedure could have a substantial price. (Limei Hoang, 29 March 2017, Business of Fashion).

Economic – The uncertainties caused by Brexit lead the Britain with a “weakening economy” (Ben Chu, 11 December 2018, Independent), thus a lot of people prefer to not spend a huge quantity of money in fashion. As a result, stores where is possible to rent luxury clothes at an affordable price, as Rent the Runway in New York City, are growing significantly, becoming the “ latest fashion trend” (Jess Cartner Molley, 1 November 2018 The Guardian). So, Ted Baker will have to face new kind of competitors.

Furthermore, this summer Ted Baker suffered the collapse of House of Fraser, where Ted Baker has several concessions. A Telegraph article published on 4 October 2018 reported Ted Baker lose immediately £600,000. (Telegraph, 04 October 2018).

Social – The Weinstein scandal and the launch of movement as Me Too led a society where people are more aware of sexual misconducts and women feel more empowered to denounce 8

sexual harassments, including those that happen in their workplace. (Glamour, 1 December 2018). This is the reason why the recent scandal involving the CEO of Ted Baker swayed public opinion: at the begging of December a Ted Baker employee launched an online petition in order to put an end to a culture of “forced hugging”, sexual jokes and harassments perpetuate by Ray Kelvin. As reported by The Guardian, Ted Baker reacted opening an independent investigation and announcing a voluntary leave of `absence of Kelvin. However, the affair has already caused a collapse of Ted share price of nearly 13% (Sara Butler, 07 December, The Guardian).

Technology – The increment of use of social media in our life has made them a crucial marketing tool capable to connect brands to consumers. (Business of Fashion, 12 April 2018). As results, more and more are investing in social media campaigns in order to attract more costumers.

Environment –In order to reduce their footprints and so the effects of global warming, more and more people are changing their behaviour attempting to reduce their footprints on the Earth; so they prefer buy from companies that make positive step to reduce pollution. An article published on Business of Fashion on 2 January 2018 states “Sustainability will be at the centre of innovation in the fashion industry in 2018”. (Business of Fashion, 2 January 2018). Furthermore, global warming is leading to unpredictable climate changes that cause a variation in costumers’ behaviour. As reported by Sky news “cold weather earlier in 2018 as well as the heatwave in the summer” have contribute to reduce Ted Baker sales (Skynews, 04 October 2014).

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Market position

Considering the quality of its product and its range of price Ted Baker is seen as a premium brand, According to a primary resource, inside this category, its major competitors are Hugo Boss, Paul Smith, Reiss, Karen Millen and French Connection. Ted Baker differs from its competitors by wide collections and affordable price. In fact, table n.4 shows Ted Baker has launched 1,126 new products in the last three month on its UK web store overcoming the supply of French Connection, Karen Millen and Reiss.

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In addiction, it shows that Ted Baker prices has a very low entry price, equal to £5.57 and the one of the lowest mid price. Even in terms of quality, Ted Baker is well located, offering products that nearly the same quality of Reiss (graph n.2)

In essence, Ted Baker stands out for selling good products has a reasonable price. “The message hasn't changed - we just want to better yesterday in terms of performance. I always wanted to create great clothes that were affordable. Most people can make nice clothes that are expensive, it's more of a challenge to make good quality products that people can afford” said Ray Kelvin (vouge, 2013).

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Pen Portrait As lifestyle brand Ted Baker offers products that are addressed to a specific costumer. (Mintel, April 2018). Firstly, a study conduct by the Huffington Post shows that Ted is more popular in the youngest generation (Huffington Post, 04 June 2017) . In fact, according to the primary resource Ted Baker typical costumer may be a 29 years old woman born in London.

She lives alone in a one bedroom apartment in Stratford. She works as web designer for a company located

Table n.5

in Tottenham Court Roar. Her income is about £33,000 per

year and she

spends the major part of her income in rent, public transport and food. What remains is spent in music, she likes go concerts, travel and fashion. Angie is not very keen on fashion but she likes to stand out from other people. She is spontaneous, very creative, too exited in some occasions and she want her clothes express her strong personality (Ted Baker, 04 December 2018). Her personal style is then reflected in every features of her life, especially her house where everything have been carefully chosen. In addiction, although she is not genuine environmentalist Angie truly cares of the quality of a products because she likes to buy objects that last as long as possible. All of these characteristics lead her to identify with Ted Baker personality. In fact, Ted Baker stand apart from its competitors thanks to its quality, attention to detail and unique style (primary source). To put in Ted Baker words her costumers want to feel no ordinary people.

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Store evaluation

Ted store, White City one, Westfield, London

Ted’s UK flagship store in Regent Street

Ted concession in John Lewis, Oxford Street

Ted Baker stores are designed to give a premium experience that the costumer could not find in any other store, according to a primary source. The premium experience is given by a quite, peaceful atmosphere. The stock is merchandised to stories and kept in very clean. Usually every story focus on a different pattern or colours. Best sellers are placed at the front and accessories are, instead, located all around the store. There are not any advertisements, except the discount label on the temporary promotion clothes. Moreover, in the flagship menswear had more importance than the womenswear as located on the ground floor.

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Furthermore, step into a Ted Baker store is always a different experience. Every store has a theme inspired by “ local culture, history and environment” said Ted’s Head of Store Design, Mark Valerio (Ted Baker YouTube channel, 9 February 2018). For instance, the theme of the flagship store in Regent Street is royalty while the store “White City One” in Westfield, refers to the dog races hosted in the White City Stadium. The presence of a store theme, however, make impossible to create a Christmas atmosphere that ends to stand out only by the window displays. On the contrary, Ted Baker concession in John Lewis, Oxford Street, is more ordinary: the stock is arranged in

“Dog race theme” (White City One, Westfield, London)

colours and the promotions are advertised.

“Christmas theme” (Ted Baker Regent Street, London)

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Website review

“Christmas Theme – website “ (Ted Baker website)

An online store is efficient if the navigation is easy, it quickly leads the costumer to the desired product and the it is attractive and Ted Baker website seems to offer all of this. Firstly, the layout is very minimal, elegant, minimal and well organised. The background is white and even the other colours are very neutral. The products are divided in categories and subcategories accessible from both homepage and a menu in the upper right. The main sections are womenswear, menswear, childrenswear. Both women and men categories include accessories, home and gifts, Gifts, Gift cards, limited collections, outlet section and Logo by Ted Baker, the branded collection with a more casual styling than the average Ted product. Being the Christmas period they have also introduced a new category that presents a range of products suitable to be Christmas presents. Furthermore, the retailer constantly upgrades the home page adapting it to the current trends or season, as illustrate in picture n.10.

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Nevertheless, the web site has some negative aspects: an unnecessary auto-redirect to the last page visited and the lack of current promotion advertisements in the homepage. In particular, the last one could result many people never finding out that promotion and so, in a loss of sales. In addiction, not having a mobile app version, the website may be difficult to use on the phone. To sum up, Ted Baker has a very useful web site with a wide product range and a sophisticated theme clearly inspired by the elegance of the physical Ted boutique. But, its organisation and the mobile version could be improved.

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Swot Analysis On the basis of the descriptions and analysis contained in the preview chapter it was possible to draft a swot analysis of the retailer.

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Conclusion

As started in the begging, Ted Baker has succeeded to establish itself as of one of the leading premium brand in the UK. In fact, its financial history shows imaginable performances. The reasons of this success are its attention to the quality, competitive prices and a multi channel approach that gives the opportunities to engage more costumers. However, above all, it is its immediately recognisable, quirky style that attracts the costumers. In fact, in 30 years Ted has always worked to give to its costumers something interesting that they couldn’t find anywhere else. The idea behind each stores is a perfect example of it. Nevertheless, pestle and swot analysis has shown a quite unfavourable market with an unseasonal weather, new competitors and the weakening of department stores. These factors and the scandal of Ray Kelvin have caused a considerable slowdown for Ted Baker. At this point, without compromising the factors that made it remarkable, Ted should think to embrace new strategies. For instance it may invest in a more aggressive advertising campaign or make partnerships with influencers. It may also increase its presence in other countries in order to be less dependent on UK market fluctuations. Anyway, how they will handle the case of Ray Kelvin will be the most important aspect for the next moths.

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Bibliography: Business of Fashion (12 April 2018), https://www.businessoffashion.com/articles/fashiontech/5-ways-brands-can-stand-out-on-social-media [Accessed 2 Dec. 2018] Business of Fashion (2 January 2018), https://www.businessoffashion.com/articles/intelligence/top-industry-trends-2018-8sustainability-credibility [Accessed 9 Dec. 2018] Business of Fashion (29 March 2017), https://www.businessoffashion.com/articles/intelligence/triggering-article-50-whatdoes-brexit-mean-for-fashion [Accessed 2 Dec. 2018] Business Insider (26 July 2018), https://www.businessinsider.com/what-will-happen-to-theuk-economy-brexit-2017-7?r=UK&IR=T [Accessed 2 Dec. 2018] Drapers (4 October 2018), https://www.drapersonline.com/news/ted-baker-sales-edgeup/7032444.article [Accessed 9 Dec. 2018] Glamour (1 December 2018), https://www.glamour.com/gallery/post-weinstein-these-are-thepowerful-men-facing-sexual-harassment-allegations [Accessed 9 Dec. 2018] Huffington Post (04 June 2017), https://www.huffingtonpost.com/entry/which-luxury-brandsare-reaching-millennial-shoppers_us_58e6670ae4b0d6001f07f246?guccounter=1 [Accessed 8 Dec. 2018] Independent (11 December 2018), https://www.independent.co.uk/news/business/news/ukeconomy-gdp-latest-october-ons-data-brexit-car-sales-a8675651.html [Accessed 12 Dec. 2018]

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Retail Week (16 M...