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UPDATE 1-Ted Baker sees fewer new openings in 2014
November 14, 2013 / 11:47 AM / 4 years ago

UPDATE 1-Ted Baker sees fewer new openings in 2014

* Third quarter group sales up 24.4 pct to 77.1 mln stg

* Expansion to slow in 2014, sees better 2015 prospects

* Shares rise 4.8 pct after almost doubling this year

By Neil Maidment

LONDON, Nov 14 (Reuters) - Designer clothing brand Ted Baker said it would open fewer new stores in 2014 after a big expansion push across Europe, the United States and Asia that has helped sales surge, and would wait for better opportunities the following year.

Sales jumped 31 percent in the first half of the year and rose by 24.4 percent in its third quarter, the firm said on Thursday, as strong trading in its core UK market was boosted by international openings and an improving wholesale market.

Shares in the company, known for classic cuts with quirky details, rose 4.8 percent to 1,874 pence at 1131 GMT, having started the day up 85 percent on a year ago.

“There’ll be a pause for breath,” Finance Director Lindsay Page told Reuters. “The long-term trend rate is 10-12 percent space growth per annum, I think we’ll be a little bit shy of that, high single digits probably next year.”

In the last 18 months, the firm has opened flagship stores in the U.S., China and Japan and concessions in several markets including in Germany, Spain and South Korea.

Page said it would ease off slightly to allow new sites and its brand to get established, and that it saw better expansion prospects in preferred markets for 2015 than in 2014.

The firm said next year’s openings, a mixture of stores and concessions, would predominantly focus on the U.S., Canada and Hong Kong, with less activity in Europe.

It will also have no new openings in China during the next year, having added its first concession to the handful of stores it owns there in the third quarter.

“We’ve got an initial footprint down to start really exploring the (Chinese) market potential but we won’t be pushing ahead on that for some time I would think,” Page said.

The company said on Thursday group revenue for the 13 weeks to Nov. 9 had jumped 24.4 percent to 77.1 million pounds ($123 million), and that it had seen a good reaction across all of its markets to its Autumn/Winter collections.

Retail sales, which make over 80 percent of group revenue, rose 19.8 percent to 58.1 million pounds on 11.4 percent more space, as the firm continued to attract British shoppers despite pressure on consumer spending and win fans overseas.

Wholesale sales rose 40.8 percent to 19 million pounds, driven by improved trading in Britain and the U.S. and the firm said full-year sales would be 25 percent ahead of a year ago.

The group, which has more than 340 stores and concessions worldwide, launched a new UK website in the quarter and plans local country sites in Australia and New Zealand in 2014.

“Ted remains a core holding for small cap investors given bright future growth prospects and high quality earnings,” analysts at N+1 Singer said.

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