Published On: Tue, Jun 11th, 2019

Ted Baker shares PLUNGE by 25 percent as fashion retailer issues new profit warning

The fashion brand reported disappointing figures for its like-for-like retail sales, which dropped by 2.6 percent on a constant currency basis for the 19 weeks to June 8. Wholesale comparable sales slumped 3.6 percent with currency effects stripped out. The troubled retailer has now issued an alert over pre-tax profits, which the company said are expected in the range of £50 million to £60 million for the year to 25 January, 2020. The share price of Ted Baker took a tumble following the announcement and was down 25 percent at 8.29am BST.

Ted Baker’s profit gloom comes after it posted a 26.1 percent slump in pre-tax profits to £50.9 million for the year to January 26, having warned over the result in February.

The group pointed blame for its latest trading troubles on “difficult and unpredictable” conditions, as well as unseasonable weather in the US and intense discounting across its global markets.

But it also admitted the group had “experienced some challenges” with its spring and summer collections, which it claimed have now been addressed.

It said: “Ongoing consumer uncertainty in a number of key markets and elevated levels of promotional activity across our global markets have resulted in extremely difficult trading conditions during the financial year to date.

“The board anticipates some of these external factors will continue to impact trade for the group and its trading partners across the remainder of the financial year.”

Ted Baker’s new boss, Lindsay Page, added that the group is now “relentlessly focused” on cutting costs to offset the trading difficulties.

She said: “As a team, we are proactively addressing the challenges we face as an industry.

“Several of our new product initiatives will commence imminently and we are confident in our collections for the coming season.”

The profit warning today comes just months after founder Ray Kelvin left the company in March following allegations of harassment.

An investigation in April found “several areas for improvement” in the clothing retailer’s HR practices.

The findings of the probe did not comment on the specific claims against Mr Kelvin.

Mr Kelvin, 64, has denied all allegations of misconduct.

At the time of announcing his resignation, he said: “Difficult though this decision is, given that Ted Baker has been my life and soul for over 30 years, I’ve decided that the right thing to do is to step away from Ted and allow the business to focus on being the outstanding brand it is so it can face 2019 with fresh energy and renewed spirit.”

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