Ted Baker’s chief executive and chairman today stepped down as the multichannel retailer warned on full-year profits and said Black Friday sales had fallen short of expectations.
The retailer, ranked Top250 in IRUK Top500 research, said that trading over the course of both November and the Black Friday period had in particular failed to meet expectations. Discounting that failed to clear stocks meant that profit margins were lower than expected – and the retailer now expects that in its full-year, to January 25 2020, profits will come in at between £5m and £10m. Both chief executive Lindsay Page and chairman David Bernstein stepped down as the profit warning was published.
In the 17 weeks to December 7, it said in a trading update today, group revenue came in at £203.8m, down by 0.3% on the same time last year. When measured on a like-for-like basis that strips out the effect of store – and business – openings and closures, were down by 3.1%. Online sales fell by 0.7% and accounted for 31% of total retail sales over the period – although in North America, sales via Ted Baker’s own site were 28.9% ahead. Retail sales of £143m were down by 5.7%, or by 4.8% LFL. Wholesale, however, saw gains. There, sales of £60.8m were up by 15.1% or 1.9% LFL.
The retailer has hired Alix Partners to review its costs while an ongoing review of assets is going according to plan. Dividend payments have also been suspended.
In its statement, Ted Baker said: “The last 12 months has undoubtedly been the most challenging in our history, yet the Ted Baker brand remains well supported by our customers, partners and trustees and we appreciate their ongoing support.”
It said it expected trading to continue to be difficult, in a way that could affect the “key trading months” of December 2019 and January 2020.
Sharon Baylay has become Ted Baker’s acting chair, while Rachel Osborne steps up from the role of chief financial officer to become acting chief executive.
Ted Baker outgoing chief executive Lindsay Page said: “I would like to thank everyone at Ted Baker whom I have had the pleasure of working with since 1997. In particular, I am grateful for the team’s support over the last 12 months.
"I would also like to take this opportunity to thank Ray Kelvin for the opportunity he gave me 22 years ago to join this fantastic brand and help to achieve his vision of creating a truly international business. I am very proud of everything the team at Ted Baker has achieved together.
"Ted Baker continues to be a very strong global brand and I wish Rachel Osborne and the rest of the team every success in achieving further growth."
Ted Baker’s fortunes have deteriorated since founder and chief executive Ray Kelvin left the business in March 2019, amid allegations of misconduct. In the first half of this financial year it reported a 0.7% fall in sales to £303.8m, while at the bottom line it reported a loss of £23m, after one-off costs and accounting changes. That’s down from a profit of £24.5m a year earlier.
Image courtesy of Ted Baker