Ted Baker shares slump on profit warning
Ted Baker has warned over profits amid ‘extremely difficult’ trading
Troubled retailer Ted Baker has warned over profits as sales slumped amid “extremely difficult” trading and woes with its spring and summer ranges.
The fashion brand – whose founder, Ray Kelvin, left in March following allegations of harassment – said underlying annual pre-tax profits are now expected in the range of £50 million to £60 million for the year to January 25 2020.
The alert came as it reported a 2.6% drop in like-for-like retail sales, on a constant currency basis, for the 19 weeks to June 8.
Ted Baker’s profit gloom comes after it posted a 26.1% slump in pre-tax profits to £50.9 million for the year to January 26, having warned over the result in February.
The group blamed the 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/summer collections, which it claimed have now been addressed.
It said the ongoing consumer uncertainty in a number of key markets and elevated levels of promotional activity across their 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 that as a team, they are proactively addressing the challenges they face as an industry.
Several of their new product initiatives will commence imminently and they are confident in the collections for the coming season.
An investigation concluded in April, finding “several areas for improvement” in the clothing retailer’s HR practices.
As a result, Ted Baker said it had launched a refresh of its HR policies to ensure their alignment with current best practice, but refused to comment on the specific allegations against Kelvin.