KENT STATE UNIVERSITY MARIAH TOMASETTI
Company Profile & Brand Strategy
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ed Baker is a publically held corporation based in London, United Kingdom prided on an unconventional approach to fashion through detail oriented design and quintessential merchandise that distinguishes style-conscious men and women from the ordinary (Phillips, 2017). Ted Baker’s retail strategy is comprised of three main channels; retail, wholesale and licensing implemented through 490 stores including licensed partner stores, concessions and outlets spanning across the UK, Europe, North America, the Middle East, Asia and Australia (Ted Baker Annual Report, 2016). Ted Baker carries a selection of womenswear, menswear, children’s wear and accessories with prices ranging from £9 accessories to £1,700 formalwear placing Ted Baker into the bridge merchandising category. Ted Baker’s supply chain upholds values of sustainability and environmental consciousness in the way they implement their manufacturing and production (Ted Baker, 2017). Ted Baker Suppliers are governed by their Ethical Code of Conduct based on The Ethical Trade Initiative Base Code, The United Nations Universal Declaration of Human Rights and the Fundamental Conventions of the International Labour Organization that places great importance on ethical sourcing. Their partnership with MADE-BY tracks their progress through Social Scorecards to ensure partnership with with factories committed to safe environments and fair wages for workers. (Ted Baker Annual Report, 2016), (MADE-BY, 2016). Sustainability within the supply chain is ensured by the Production and Buying teams visiting suppliers on a regular basis to develop relationships and honest communication as well as partnerships with charities such as Newlife to ensure faulty garments do not end up in landfills (Newlife Charity, 2017), (Ted Baker Annual Report, 2016). In addition to sustainable sourcing and a strict ethical code of conduct, an emphasis on developing sustainable product is carried out through Ted Baker’s commitment to the Sustainable Clothing Action Plan (SCAP), unifying industry, government and third parties. Their dedication to reducing their carbon, waste and water footprints are also monitored in an effort to reduce the amount of
waste generated by 15% by 2020 (Ted Baker Annual Report, 2016), (Wrap, 2017).
Financial Performance TED’s gradual increase in revenue over the past five years is predominantly due to “the company’s...international model, which means it has significantly more concessions than high street shops,” setting the brand apart from its closest rivals (Armstrong, 2017). TED’s ability to open new locations as the right time, in areas that are sought after has helped lead to a gradual increase in revenue within the last five years (Armstrong, 2017). As of January 2017, the company has experienced a 35.1% increase in online revenue, despite the fluctuating global markets and the impact of the Brexit vote in 2016 (Soaring, 2017). As of June 2017, TED has shown a 14.2% increase in revenue compared to the same 19-week period in 2016, in line with company expectations for the 2017 year (June 13). Figure 1.1 represents the annual revenue, gross profit, and net profit for Ted Baker, PLC. from 2012-2016. All numbers were acquired from Ted Baker Annual Reports for years 2012-2016. Figure 1.1
Market Position Ted Baker considers its most relevant competitors to be Tommy Hilfiger and Calvin Klein. While each brand is distinguished by their well-defined brand images, they are highly competitive and appeal to a similar, young, working, millennial consumer. Each of the brands are experiencing exponential growth in revenue and by the end of the 2016 year; Calvin Klein revenues increased 7%; Tommy Hilfiger’s revenue grew by 4% (PVH Annual Report 2016); and Ted Baker’s revenue increased 17.7%
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(Ted Baker Annual Report, 2016). While Ted Baker’s revenue for the 2016 fiscal year represents a smaller share in the market as seen in figure 1.2, Ted Baker is growing exponentially. Figure 1.2
Figure 1.2 above show 2016 revenue for Calvin Klein, Tommy Hilfiger, and Ted Baker. Ted Baker’s share of total global apparel luxury market share equals £1,060,265,345,020.00 is equal to .00005%. In regards to product offerings, all three brands are proficient in men’s women’s and children’s product categories with similar product offering for all segments. Ted Baker also has an extended online offering through licensed partner stores such as Bloomingdales that carry Ted Baker children’s wear while both Calvin Klein and Tommy Hilfiger carry kids merchandise on their online site.
SWOT Analysis Strengths of the company include; TED’s Focus on sustainability in sourcing, production and fair treatment of factory workers (Ted Baker Annual Report, 2016), (MADE-BY, 2017), the diverse supply chain, scattered throughout various regions, reducing dependence on a small number of suppliers (Ted Baker Annual Report, 2016), a high level of consumer awareness, brand image and perception (Mortimer, 2017) as well as TED’s
continual brand development, growth, and consistency (Crux, 2013). Weaknesses of the company include a Lack of advertising campaigns (Ted Baker, 2017), reliance on the honesty and ethicality of factories used to produce merchandise (Ted Baker Annual Report, 2016) and Increasing receivables (20.3%) from 2015 to 2016 (GlobalData Ltd., 2017). Threats arise in competitors such as Tommy Hilfiger and Calvin Klein’s popularity among the same market (Business of Fashion, 2017). Advertising campaigns by competitors in high traffic areas, such as their location on Regent Street in London (Canadean, 2014) pose a threat as well as quickly changing consumer preferences (GlobalData Ltd., 2017), (Canadean, 2014) and counterfeit merchandise market tarnishing brand image (GlobalData Ltd., 2017). Opportunities lie in enhancing consumer experience both online and in their brick-and-mortar stores (Tovey, 2016), further expansion into new territories and developing a positive reputation in their market (Canadean, 2014). The opportunity implemented through this report is the extension the breadth of collections offered (Ted Baker Annual Report, 2016), (GlobalData Ltd., 2017). Expanding brand awareness among potential consumers (Canadean, 2014).
Plus Size Market Proposal Within the last five years, Ted Baker has seen a steadily increasing revenue, finishing the last fiscal year with £530,986,000.00 (Five, 2017). While the increasing revenue is indicative of a successful brand, the plus size market still holds great opportunity for Ted Baker. The rising obesity levels in the UK has left the women’s plus size market wildly underserved, especially women size 18 and up. With the rise in the plus market, more money is being spent on plus size women’s wear, specifically. For every five pounds (GBP) spent, one pound is spent on women’s plus size clothing (Russell, 2017). According to a survey done by the NHS, 26.8% of women ages 16-24 are overweight, with an increase from 12.9% in 2014 to 15.9% in 2015 (Russell, 2017). Additionally, 60.9% of plus size women were found to prefer shopping at a core brand rather than a sub-brand, catering to plus sizes specifically (Gonsalves, 2015).
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Ted Baker online sales have risen to 35.1%, despite the fluctuating market (Soaring, 2017) creating an even larger opportunity for increased online sales given 45% of plus size shoppers utilize online platforms to make purchases (Russell, 2017). The plus size market is one that gets misunderstood, with inconsistent size ranges and various interpretations of the term “plus size”. In fact, 27% of women believe that plus size starts at size 16, while 15% of women believe it starts at size 20 (McCrum, 2016). Additionally, 64% of Image women, size 20, believe that high street stores don’t offer a sufficient range of plus size fashion, with that percentage rising to 67% of women, size 22 (McCrum, 2016). The plus size market in the UK has huge potential that is just beginning to be explored for high street retailers. Ted Baker has a great opportunity to increase sales revenue, increase foot traffic/clicks, and to broaden their target market, ultimately leading to more success for this continuously evolving and growing brand.
Target Customer Meet Gabi, a 29-year-old product manager for Facebook based in London, England. She makes around £53,000 a year. Gabi rents a one-bedroom apartment in Zone One in London, shared with her husband and cats. She enjoys traveling, cooking, photography, blogging (parttime income established from her blogging career), and public speaking to catalyze women’s empowerment. Gabi shops at at Ted Baker’s Regent Street location in London which she finds convenient because of her job in the city. She visits around two or three times per month to purchase product and determine current trends and spends around £1,000-£2,000 each month on plus size
merchandise and accessories. Aside from shopping at Ted Baker, Gabi shops at Burberry, Karen Millen, Tommy Hilfiger and finds inspiration from foreign cultures while traveling to countries such as Greece, Africa, and Italy. She also keeps up by following other plus-size bloggers such as Tanishi Awasthi; founder of Girl with Curves, and celebrities like Rihanna, Amy Schumer and Rebel Wilson. For Fall/Winter 2018 our target consumer is inspired by the Old West of America, 1.1 specifically by elongated silhouettes, simple color palettes, and a youthful pairing of textures. She will be shopping for wide-leg pants, elongated sweaters and utility jumpsuits that accentuate her curves. Plus size consumers are more likely to purchase fashionable clothing in their size by welldeveloped and trusted brands. Ted Baker is filling this growing void by offering fashionable, ready-to-wear, quirky and distinct styles for the plus-size working woman.
F/W 2018 Forecast Ted Baker will remain consistent with their brand image and direction in the Fall/Winter 2018 season. The approach to integrating “Origins”, a trend forecasted by The Doneger Group, will reflect upon the style direction of Ted Baker in this season through the careful selection of organic fabrics, garment silhouettes, and playful textures (Doneger Creative Services, 2017). The increase in retail sales up 15.0% from 2016 to 2017 is a testament to the growth and effectiveness of the style direction of Ted Baker, as well as Ted Baker’s uniformity through all retailing channels. Continuing in the direction of the prior fiscal year will ensure dependable growth for the 2018 F/W season. (Ted Baker Annual Report, 2017).
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Image 1.2
“Origins” is a return to simplicity, evoking organic and natural elements of nature and culture integrated into the element of apparel. A focus on sustainability, raw materials, and humanity will be the source of influence on the F/W 2018 collections. (Doneger Creative Services, 2017)
Image 1.3
Image 1.4
Color Swatches
Fall/Winter 2018 Fabrics & Print Forecast Subdued tones, dusty earth hues and variations of brown create a central focus around the elements of nature. Neutral colors allow for a focus on unique textural combinations and the integration of bright performance wear into the F/W 2018 trend direction. (Pantone, 2017; Doneger Creative Services, 2017). Prints and patterns are kept to a minimum and are integrated into the fabric of the design through texture. Herringbone, wood grain, wild animal and feather, muted plaids, a variation of florals, and the element of line are utilized to enhance the naturalist aspect of the trend (Doneger Creative Group, 2017; WGSN, 2017). Homespun, earthy materials are utilized, intended for protective performance include furs, tweed, wool and organic cottons (Doneger Creative Services, 2017).
Sample Fabrics
Sample Print
Fall 2017 Key Items & Silhouettes Key items include oversized fur coats, utility jumpsuits, pants and jackets, as well as shapeless sweaters and knits. (Doneger Creative Services, 2017; WGSN, 2017; WWD, 2017). Ted Baker’s take on classic and youthful staples influenced by Doneger’s “Origins” trend embody the balance between Ted Baker’s brand image and a fresh take on the F/W 2018 Line.
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Each key item was carefully chosen to reflect the trend direction for the F/W 2018 season. Slouchy trousers integrate an updated look into the work pant extending Ted Baker’s selection of classic pieces. Both the utility jumper and oversized trench coat blend the element of masculinity in their oversized silhouette, and a touch of feminine definition at the waistline with utility style belts and dainty findings. The lounge sweater was chosen for its utilization of natural fabric and bulky shape. The attention to detail in the construction of the garment reflects the careful choices of Ted Baker while integrating a new take on the oversized sweater. The button down is a reflection of the simplicity of the line, made with organic cotton, minimal findings, and a simplistic and elongated shape. Image 1.5
resources such as rocks, leaves, and bark through the use of texture and organic fabrics. A focus on the integration of craftsmanship and technology is the origin of the trend. (Doneger Creative Services, 2017; WGSN, 2017). Image 1.6
Quick Cost Analysis & Pricing Strategy The tables below contain precise information regarding each of the ten styles planned to launch in Ted Baker’s Fall/Winter 2018 Line. Each style can be offered at the unit retail price calculated based on Ted Baker’s price point, commitment to quality, the cost of fabric, and the targeted consumer’s income and willingness to spend. Image 1.5
Figure 1.3
Fall 2017 Line Direction: Origins “Origins” encapsulates a rustic take on country living. Microtrends, “Nuance” and “Woodland” embody two contrasting, yet cohesive aspects of nature. One of serenity and sophistication translated into hints of femininity throughout the trend and one displaying the aspect of natural
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Six Month Merchandising Plan Figure 1.4
Ted Baker’s size selection is based on UK sizes for their Regent Street, London location. Sizes range between 16-24 for bottoms and sizes 16-26 for select tops. The highest concentration lies between the sizes 18-22 given Ted Baker’s loyal young professionals market (Global Data, 2017). This season, Ted Baker is expanding their distribution into the plus size range offering a dispersion of 10% to sizes 24 plus as seen in Table 3.2 to implement market expansion among UK consumers (Ted Baker Annual Report, 2016). Figure 1.6
Distribution Ratios Ted Baker’s size selection is based on UK sizes for their Regent Street, London location. Sizes range between 16-24 for bottoms and sizes 16-26 for select tops. The highest concentration lies between the sizes 18-22 given Ted Baker’s loyal young professionals market (Global Data, 2017). This season, Ted Baker is expanding their distribution into the plus size range offering a dispersion of 10% to sizes 24 plus as seen in Table 3.2 to implement market expansion among UK consumers (Ted Baker Annual Report, 2016). Figure 1.5
The color distribution for Ted Baker is based on Pantone’s color forecasting for 2018 (Pantone, 2017), Vogue Paris’ pattern forecast based on Paris Fashion Week’s runway report (Eugénie Trochu, 2017), and Origins, a trend report from Doneger (Doneger Creative Services, 2017). Ted Baker’s classic British appeal and dedication to attention to detail in their garments require a wide selection of neutral colors in order to integrate novelty fabrics into their Fall/Winter 2018 line (Global Data, 2017). Colors and patterns chosen are appropriate for the workplace, and allow Ted Baker’s customer to be distinct by quirky and out of the ordinary design emphasized by simple pattern and color choices (Ted Baker, 2017). Colors are distributed fairly evenly throughout the style distribution to ensure versatility within their line. Patterns such as Mudcloth and Dandelion are kept to a minimum to ensure the focus of the garment is on the design.
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Style Sheet & Assortment Plan
Figure 1.7
Figure 1.8
The style sheets pictured above represent two of the garments presented in the Fall/Winter 2018 line based off of the trend Origins. Style number, retail price, available sizes, fabric contents, style description and additional notes on trims and special treatment are included on each of the sheets to insure proper development and ease of production. The Assortment plan for two additional garments are also included (see Figure 1.9 and 2.0) as a representative breakdown of each garment, the sizes ordered in each color and size
accounting for total unit cost, unit retail cost, total cost and total retail. Styles bought are based off of predicted sales, current trends, and consumer needs and wants. All numbers calculated in the assortment plan sample sheets are based on November’s open-to-buy.
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Figure 2.1
Figure 2.0
Purchase Order Figure 2.1
Figure 2.1 displays the purchase order for November 2018. Planned sales for November were £21,034.00 and after calculation we fall within budget at £21,021.10 for Ted Baker’s Regent Street, London location.
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ed Baker is a well-developed, leading brand in the fashion industry acting on areas of potential growth for the company. TED’s loyal consumer base, paired with impeccable product and a dedication to transparency and sustainable sourcing and development are all factors that are securing the company in the market. Expanding product breadth, a goal for the company stated in Ted Baker’s 2016 Annual Report, is being implemented through market expansion into the plus size department. A growing need for fashionable merchandise in a larger range of sizes is needed and necessary for Ted Baker’s growth. Based on the trend “Origins” from Doneger Creative Services, TED is developing a line that is out of the ordinary and just as unique as the customers wearing Ted Baker. The Fall/Winter 2018 line will be produced in Ted Baker’s traditional sizes and plus size, optimizing the distinct community of the brand without discriminating styles based on size. In comparison to Ted Baker’s competitors, Ted Baker has a unique position in the market being based in the UK with 490 stores worldwide and an increasingly active consumer base online. The line not only provides updated styles to the plus size consumer, but excites them to represent an elevated brand with a distinct statement. In this case both the company and the unmet needs of a new market will be satisfied.
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References 1 bedroom property to rent (2017). In rightmove. Retrieved October 2, 2017, from http://www.rightmove.co.uk/property-torent/property-62109322.html (June 13, 2017 Tuesday 6:30 AM EST ). Ted Baker Announces 14.2% Increase in Group Revenue from Jan. 29 - June 10, 2017. India Retail News, Retrieved from www.lexisnexis.com/hottopics/lnacademic Armstrong, Ashley, and Sam Dean. Revenues jump at Ted Baker as online sales continue to grow, The Telegraph, June 2017, www.telegraph.co.uk/business/2017/06/13/re venues-jump-ted-baker-online-salescontinue-grow/. Accessed 6 Sept. 2017. Armstrong, Ashley and Sam Dean. (2014, June 16). Ted Baker pushes on with overseas expansion as online sales surge. Retrieved from http://www.telegraph.co.uk/business/2016/0 6/14/ted-baker-pushes-on-with-overseasexpansion-as-online-sales-surg/ Armstrong, Ashley. Ted Baker defies retail gloom with rising sales and profits, The Telegraph, 23 Mar. 2017, www.telegraph.co.uk/business/2017/03/23/te d-baker-defies-retail-gloom-rising-sales-pro fits/. Accessed 6 Sept. 2017. BOF Team. (2017, January 3). Avery Baker on Tommy Hilfiger's Fashion Immediacy Strategy. Retrieved from https://www.businessoffashion.com/articles /voices-video/video-avery-baker-on-tommyhilfigers-fashion-immediacy-strategy Canadean and Progressive Media Group Limited. (2014, February 20). Canadean - SWOT Analysis. Retrieved from http://www-lexisnexiscom.proxy.library.kent.edu/hottopics/lnaca demic/
Crux, James. (2013, June). Ted Baker to remain the height of fashion. Retrieved from https://www.sharesmagazine.co.uk/article/t ed-baker-to-remain-the-height-of-fashion EugÊnie Trochu (20 August 2017). Retrieved October 22, 2017, from http://en.vogue.fr/fashion/fashioninspiration/diaporama/fwah2017-fall-winter-20172018 -fashion-trends/41670 Fashion Trends – WWD. (n.d.). Retrieved October 03, 2017, from http://wwd.com/fashion-news/fashiontrends/ Five Year Summary (2017). In Ted Baker London. Retrieved September 27, 2017, from http://www.tedbakerplc.com/investorrelations/five-year-summary Global Data (n.d.). Retreived October 22, 2017, from http://www-lexisnexiscom.proxy.library.kent.edu/hottopics/lnacademic/ Gonsalves, R. (2015, July 26). Plus Size Clothing: Top Fashion Brands Are Finally Offering Sizes And Designs For The FullerFigured. In Independent. Retrieved October 1, 2017, From http://www.independent.co.uk/life-style-50/plus-size-clothing-top-fashion-brands-are-fin Ally-offering-sizes-and-designs-for-thefuller-figured-10416828.html MADE-BY (2016). Ted Baker. Retrieved from http://ted-baker.modetracker.org/ Marketing Manager salaries in UK (2017). In reed.co.uk. Retrieved October 2, 2017, from https://www.reed.co.uk/averagesalary/marketing-pr/marketing-manager Mccrum, K. (2016, March 23). What is plus-size? Shoppers and UK high street shops can't seem to decide. In Mirror. Retrieved October 1, 2017, from http://www.mirror.co.uk/news/worldnews/what-plus-size-shoppers-uk-7612695
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Mortimer, Natalie. (2017, March 15). Ted Baker talks creative freedom as it launches ‘Keeping up with the Bakers’ sitcom. Retrieved from http://www.thedrum.com/news/2017/03/15/t ed-baker-talks-creative-freedom-itlaunches-keeping-up-with-the-bakerssitcom Newlife. (2017). Newlife partners; Together we will make life better, for the children and families we serve. Retrieved from http://newlifecharity.co.uk/docs/general/Ne wlife-Partners.shtml Pantone. (n.d.). Retrieved October 22, 2017, from https://www.pantone.com/color-finder/153910-TCX Phillips, Jenni. (2017, February 25). Ted Baker is on its way to the Quays; Shopping top high street brand adds to big names growing at outlet centre. Retrieved from http://wwwlexisnexiscom.proxy.library.kent.edu/hottopics/lnaca demic/ Product Manager (2017). In glassdoor. Retrieved October 2, 2017, from https://www.glassdoor.co.uk/Job/productmanager-jobs-SRCH_KO0,15.htm Russell, M. (2017, June 1). UK plus-size market a retail growth opportunity. In just-style. Retrieved September 27, 2017, from https://www.just-style.com/news/uk-plussize-market-a-retail-growth-opportunity_id130 826.aspx Soaring online sales help Ted Baker to increased profits of £61.3m, Business Reporter, Mar. 2017, https://businessreporter.co.uk/2017/03/23/soaring-online-saleshelp-ted-baker-increasedprofits-61-3m/. Accessed 6 Sept. 2017. Sustainability & the Environment. Retrieved from www.tedbakerplc.com/tedsresponsibilities/sustainability-and-theenvironment.
Team, G. (2016, March 8). 25 UK Jobs Where You Can Earn More Than £50,000. In glassdoor. Retrieved October 2, 2017, from https://www.glassdoor.co.uk/blog/25-ukjobs-earn-50000/ The Doneger Group. (n.d.). Retrieved October 22, 2017, from http://www.doneger.com/dcs/Inspiration/fw 18/Origins/Mood.html Tovey, Alan. (2016, March 17). Ted Baker in fashion as sales surge helped by global expansion. Retrieved from http://www.telegraph.co.uk/business/2016/0 3/17/ted-baker-in-fashion-as-sales-surgehelped-by-global-expansion/
Wells, C. (2017, January 10). Household disposable income and inequality in the UK: financial year ending 2016. In Office for National Statistics. Retrieved October 2, 2017, from https://www.ons.gov.uk/peoplepopulationa ndcommunity/personalandhouseholdfinances/i ncomeandwealth/bulletins/householddispo sableincomeandinequality/financialyearending 2016 WRAP. (2017). Durable Quality Management Process. Retrieved from http://www.wrap.org.uk/sites/files/wrap/Te d%20Baker%20final.pdf Image References Cover Page Image Retrieved from http://tedbaker.com/ Image 1.1 Retrieved from http://www.whowhatwear.com/what-to-wear-withcoats/slide15 Image 1.2 Retrieved from http://www.doneger.com/dcs/Inspiration/fw18/Orig ins/Womens-Inspiration.html
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Image 1.3 Retrieved from http://www.doneger.com/dcs/Inspiration/fw18/Orig ins/Runway.html Image 1.4 Retrieved from http://www.doneger.com/dcs/Inspiration/fw18/Orig ins/Womens-Inspiration.html Fabric Samples Retrieved from http://www.doneger.com/dcs/Inspiration/fw18/Orig ins/ Print Sample Retrieved from http://www.doneger.com/dcs/Inspiration/fw18/Orig ins/Color-Fabric.html Image 1.5 Retrieved from https://www.wgsn.com/content/image_viewer/#/im age.22241369/set/%5B%22image.22237496%22,%22i mage.22073228%22,%22image.22241369%22%5D Image 1.6 Retrieved from: http://www.doneger.com/dcs/Inspiration/fw18/Orig ins/ Flats Retrieved from https://www.wgsn.com/content/image_viewer/#/im age.22241369/set/%5B%22image.22237496%22,%22i mage.22073228%22,%22image.22241369%22%5D Final Page Image Retrieved from http://www.tedbaker.com/uk/Womens/Clothing/Pl aysuits-andJumpsuits/c/category_womens_clothing_playsuitsjumpsuits
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