INVESTORS will be looking for progress in Ted Baker's underperforming wholesale business when the global fashion label, which began as a single Glasgow shop, reports this week.
Although the company's retail side is expected to continue to demonstrate strong growth, the performance of its wholesale division's customers amid difficult trading conditions has caused some concern.
The group is expected to provide an update on possible moves to reduce the number of wholesale customers it supplies when it announces interim results on Thursday.
Richard Ratner, retail analyst at Seymour Pierce, said the impact of the reduction in wholesale sales on the group's revenue mix may mean the £7.65m pre-tax profit figure he has pencilled in for the first half of the year "may be slightly optimistic", but overall he was positive about the company's progress.
He said its approach to the wholesale arm, which supplies independent high-street shops, was indicative of a strategy which has made it one of the UK's most successful niche retailers in recent years.
"They protect the integrity of their brand, not just in terms of where their own shops are, but also who they sell wholesale to."
He added that he didn't believe an update on Ted Baker's trading performance will provide much guidance on the health of the high street as a whole.
"They are an aspirational brand and their results are not particularly indicative of what is happening elsewhere, but they do demonstrate what you can do at that end of the trade."
John Dickinson, an analyst at Brewin Dolphin in Newcastle, said he expected that the retail side of the business will have performed "much better" than wholesale.
"They are trying to re-organise the wholesale business into fewer accounts, and that will impact on the figures on that side."
He said that the business had an "immaculate track record".
"They have cash on the balance sheet and have delivered very consistent growth over a long period."
In a trading update in June, Ted Baker admitted some of its wholesale customers were "not having such a good time on the high street" and that some may no longer be "appropriate" for the company.
It reported that retail sales in January to June had jumped by 13% but that wholesale sales had fallen by 6.7% over the same period.
Ted Baker was founded by current chief executive Ray Kelvin, who was born in Middlesex and opened the first Ted Baker store in Glasgow in 1987. He floated the business on the stock market in 1997.
Although the UK remains its core market, it has also invested in global expansion over the past year, particularly in Asia and the Middle East. In recent months, licensed stores have opened at locations including Dubai, Singapore, Bangkok, Jakarta and Hong Kong.
Shares in the group, which is valued at £210m, have trebled over the past five years. Kelvin owns just under 39% of the company.
