Ted Baker has said store closures could be a possibility if it is “unable to agree commercially acceptable terms” in lease renegotiations happening in the months ahead.
In its latest half-year report, the retailer said it had been negotiating rent savings with landlords over the past six months “in the light of the current economic conditions”.
It has made £7m of rent savings over the course of this financial year, up from the £3m savings announced at its July AGM, and said it was “on track to benefit from £20m of turnover-related rent savings”.
The business added it had also deferred £10.4m in rent payments as a result of Covid-19.
Where lease renewals have occurred, the retailer said it has been “moving from fixed rent to turnover rent”.
The retailer added that “progressive landlords” have used the pandemic “to reflect the new economic reality in new rental terms”, which it said was welcome.
However, it added that some landlords “still must recognise the new landscape” and said it was looking to renegotiate more lease agreements.
The retailer’s group revenue fell to £169.5m for the 28 weeks ended 8 August 2020 compared to £313m last year, and losses widened to £86.4m from £23m.
Ted Baker chief executive Rachel Osborne said 2020 had been an “unforgettable period mostly for the wrong reasons”, during which Ted Baker has had to “navigate a challenging demand environment while also addressing the problems of our past”.
She added: “Inevitably the competitive landscape will evolve post-Covid. We also expect our landlords to adapt to the new economic reality which means Ted Baker will have structurally lower and more variable rent.”
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