Luxury Retailer Ted Baker Tries Pop-up Stores Away From City Centers

With many workers still staying away from their offices, designer clothing retailer Ted Baker is trying out pop-up stores in smaller towns. The U.K.-based company is struggling with sales due to the fact that city life has not returned to pre-pandemic “normal.”

The Financial Times reported that for the three months ending in April, store sales were down 40 percent compared with last year. This trend was particularly seen with city stores near office buildings.

The luxury retailer has more than 520 stores and concessions worldwide, including about 192 in the U.K. and 111 in the U.S. and Canada. More than a third of Ted Baker’s stores are in large cities and shopping centers. With its new strategic pivot, the retailer plans a trial of “extremely short leases” of less than six months in smaller towns and shopping centers.

CEO Rachel Osborne said that Ted Baker had been “well-placed” to benefit from increased foot traffic before the pandemic hit. “If the footfall remains where it currently is, clearly we have an option to expand those lease terms and take advantage of that change,” Osborne told the FT. She added that she expects shoppers to ultimately return to city centers: “It’s just that it will take longer to get there.” In the meantime, however, the company is trying out its pop-up store approach.

The drop in urban foot traffic has led to a battle between retailers and commercial landlords. Ted Baker said that through the year ending Jan. 31, it had negotiated rent savings of 8 million pounds, along with an additional £27.8m in savings coming from lease turnover.

In general, there’s a lot of positive momentum with retail sales. PYMNTS reported that the National Retail Federation predicts that U.S. consumers will push retail sales to more than $4.44 trillion in 2021. That’s up from the $4.02 trillion total for 2020, according to a press release.

Senior citizens, whose spending was significantly curtailed by the pandemic, are expected to spend substantially across a number of sectors as COVID-19 restrictions and fears recede.