Quiz and Ted Baker ahead, Moss Bros issues warning
Quiz: ‘continued strong momentum’
Fashion retailers Quiz and Ted Baker were among the winners in the Christmas trading period while Moss Bros struggled and today has issued a profits warning.
Quiz: the Glasgow-based fashion chain, said trading was in line with expectations with a 31.9% (31.2% constant currency) increase in group revenue for the seven-week period from 19 November to 6 January against the comparable period last year.
This strong performance reflects continued good growth across the group’s omni-channel business model as well as the increasing awareness of the Quiz brand.
The group generated strong full price sales in the lead-up to Christmas and as a result the Group gross margins in the period were in line with expectations.
The brand has continued to grow rapidly online with group online revenue increasing by 119%. This expansion was driven by continued strong growth through the company’s own website as well as through new and existing third party online retailers. This growth was enabled by the investment made in expanding the group’s distribution centre undertaken during 2017.
International sales increased by 51.1% (46.9% in constant currency). The growth reflects increased sales through our franchise partners, the introduction of the first three stores in Spain and strong revenue growth from Irish stores and concessions.
The group’s UK standalone stores and concessions also performed strongly with sales increasing by 11.6% during the Period. In December 2017, Quiz opened its fifth standalone store of the financial year in Bristol. The UK stores’ and concessions’ retail square footage as at 6 January was 192,000 sq. ft. (January 2017: 185,000 sq. ft.).
Tarak Ramzan, chief executive, said: “We are pleased with Quiz’s continued strong momentum across the group’s omni-channel business model during the important Christmas trading period. This growth reflects the strength of our brand and the appeal of our products to customers who want the latest looks at fantastic value.
“We are continuing to execute our growth plans in each area of the business, underpinned by continued investment in our marketing, people and infrastructure. We continue to look forward with confidence as we build on our strategy to develop Quiz as a global fast-fashion brand.”
Ted Baker: ‘strong growth from e-commerce’
Ted Baker: the retailer announced that retail sales increased by 9% (10.5% in constant currency) for the 8 week period from 12 November to 6 January, compared to the same period last year.
E-commerce sales increased by 35% (36.4% in constant currency) and represented 30.1% of total retail sales.
Average retail square footage rose by 5.9% to 409,226 sq.ft (2016: 386,252 sq.ft) and the group’s expansion continued with the opening of a store in Montreal, further concession openings in Germany and Spain and – with its licence partners – an additional store in each of Malaysia, Mexico and Qatar.
Gross margins were in line with expectations and the company expects to end the year with a clean stock position.
Ray Kelvin, founder and chief executive said: “The Ted Baker brand has continued to perform in line with expectations over the Christmas period, delivering a good retail performance driven by particularly strong growth from e-commerce, which is an increasingly important part of our retail business.
“This pleasing result reflects the strength of the brand and the quality of our collections as well as the hard work, skill and commitment of our teams.
“Whilst external trading conditions are expected to remain challenging in the year ahead, the strength of our brand and business model means that we remain well positioned to continue the long-term development of Ted Baker as a global lifestyle brand.”
Moss Bros: the formalwear retailer warned that annual profits will be slightly below current market expectations.
It expects full-year, pre-tax profit of between £6.5m and £6.8m, blaming lower than expected shopper numbers in its stores in December.
From the beginning of December to 6 January like-for-like sales were down 8% compared with the previous year.
Hire of suits only accounts for 10% of the company’s business. For the 23 weeks to 6 January those sales were down 3.6%.
Brian Brick, chief executive, said: “We faced a very tough December trading environment, which led to a significant reduction in store footfall and a hardening of the corresponding competitive environment in which we operate.
“This, coupled with strong cost headwinds and a desire to protect margins, led to a disappointing year end short fall to sales and subsequently to our anticipated profits for the full year.”