23rd Mar 2020 11:24
(Alliance News) - Ted Baker PLC on Monday said a vast majority of stores globally have now closed due to the Covid-19 outbreak and announced the sale and leaseback of its head office.
Ted Baker pocketed GBP78.8 million from the sale of Big Lobster Ltd, a subsidiary whose sole asset was the struggling retailer's head office in St Pancras Way, London.
Big Lobster was sold to a subsidiary of British Airways Pension Trustees Ltd.
Ted Baker said GBP72 million of the sale proceeds will be used to pay existing debt.
Ted Baker added: "In connection with the sale, Ted Baker has entered into a short-term lease of the property for a period following completion, and at completion will enter into an option with the purchaser to take a long-term lease of part of the adjacent newly developed property, to be known as Bowline, Tribeca, St Pancras Way."
The sale needs the approval of the company's shareholders, and it has received the backing of Ray Kelvin, who holds a 35% stake in the company.
Kelvin is the firm's former chief executive. He took a voluntary leave of absence in December 2018, after he was accused by Ted Baker staff of forced "hugging" and inappropriate touching and comments.
On Covid-19, Ted Baker said 384 stores, more than 90% of its estate, have been closed. The stores accounted for 68% of sales during the last financial year.
Ted Baker said: "Ted Baker's eCommerce channel has proved much more resilient and the performance in the financial year to date (last 8 weeks) has been up 16% on last year, albeit with some variability across recent weeks. The eCommerce service continues to operate for customers as normal, and is a channel the group will be intensively managing during this period of store closures."
Supply chain disruption has been minimal, Ted Baker said, with factories in China operational again. Inventory levels are also "sufficient", the retailer added.
The company welcomed the 12-month 100% business rates holiday issued by the UK government, lending its support to the retail market. Ted Baker paid GBP6.2 million in business rates in the UK during its last financial year.
The company said the full-year impact from Covid-19 is unclear, so for the moment, it has left guidance unchanged.
Ted Baker affirmed it expects to report underlying pretax profit between GBP5 million and GBP10 million for the year ended January 26, 2020.
Acting CEO Rachel Osborne said: "The spread of Covid-19 has led to some unprecedented events around the world and uncertainty for our business and our people. We welcome the support packages so far announced by governments and continue to focus on keeping our customers and employees safe and all of our stakeholders informed. By doing this, and by continuing to transform the way the business operates guided by our strategic priorities, we remain confident we can realise Ted's exciting, long-term potential."
Shares in the company were 20% lower at 138.49 pence each in London on Monday morning.
By Eric Cunha; [email protected]
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