Ted Baker is consulting staff about making at least 500 redundancies through its ongoing transformation of the business. When the fashion brand announced the transformation in June it described it as Ted Baker’s response to “the structural transition from physical stores to digital retail”. That transition has accelerated as a result of the Covid-19 pandemic.
In a statement, Ted Baker said: “Ted Baker confirms that as part of our continuing transformation plan, we have been assessing the appropriate level of staffing across our business and are in consultation with affected colleagues.
“We have not taken this decision lightly and would like to thank all our colleagues for their hard work and commitment. However, we believe this is necessary in order to transform Ted Baker and create a more sustainable business in the future.”
Both full-time and part time jobs are expected to be affected by the plan, with 200 jobs likely to go from its London headquarters and the remainder from its 46 shops in the UK and Europe and from store concessions. However, there are no current plans to close shops. At the end of its latest full-year, Ted Baker, ranked Top250 in RXUK Top500 research traded from 46 owned shops, 242 concessions and 22 outlets.
Setting the context
In June Ted Baker announced a digital-first approach to retail that would see its ecommerce platform upgraded and a new payment service gateway, while it also streamlined its supply chain.
News of the transformation plan came as it reported revenues of £630.5m in the year to January 25 2020, down by 1.4% on the previous year. Retail revenues during the year fell by 4.6% to £439.9m as revenues from stores fell by 5.3% and online revenues fell by 2.5%. At the bottom line it reported a pre-tax loss loss of £79.9m as it restated the value of its inventory in both January 2019 and 2020.
Following Covid-19 lockdown, Ted Baker sales fell by 36% in the first quarter of the year, despite strong online growth of 50% in the 14 weeks to May 2, and 78% growth in the six weeks from March 22.
The news from Ted Baker is the latest in a series of retail job cuts in recent weeks, as Covid-19 speeds up the shift online. Boots and John Lewis both cited shoppers’ new appetite for shopping online rather than in-store as they announced store closures putting, between them, thousands of jobs at risk at the beginning of this month.
There are also reports that Marks & Spencer will soon announce job losses, although today it said in a statement:
“We don’t comment on speculation and, if and when we have an announcement to make, our colleagues will be the first to know.”