21st Mar 2019 08:00
LONDON (Alliance News) - Ted Baker PLC on Thursday reported a significant drop in annual profit despite what it called a "resilient performance" amidst very tough trading conditions.
For the year ended January 26, the upmarket fashion retailer posted pretax profit of GBP50.9 million, down 26% from GBP68.8 million a year ago. Before exceptional items, pretax profit fell 14% to GBP63.0 million.
Exceptional items in the year amounted to GBP12.1 million, higher than GBP4.7 million a year ago.
They included the impairment of retail assets in the UK, Europe, US and Asia, debtor balances owed by House of Fraser, which are no longer expected to be recovered after the department store's entrance in administration in August, and costs related to an independent investigation into sexual harassment allegations against Ted Baker's founder & former Chief Executive Ray Kelvin.
Ted Baker reduced its total dividend by 2.5% to 58.6 pence per share from last year's 60.1p. This was after recommending a final payout of 40.7p, lowered from 43.5p a year ago.
Revenue however, rose 4.4% to GBP617.4 million from GBP591.7 million, on the back of increased sales in all of the company's geographies.
Retail sales, including e-commerce, were up 4.2%, with UK & Europe sales up 4.6%, North America 4.7% higher, and Rest of the World up 4.7%.
E-commerce sales on their own increased 20%, while Wholesale sales rose 4.8%. The company said e-commerce is becoming an "integral and increasingly important component" of its business proposition.
"Performance has been impacted by the very difficult trading conditions throughout the year including competitive discounting across the retail sector, consumer uncertainty, the well-publicised challenges facing some of our UK trading partners and the unseasonable weather across our global markets at different points throughout the period," Ted Baker said.
It added: "Despite this challenging backdrop, Ted Baker continues to develop as a global lifestyle brand reflecting the strength of the brand, the design and quality of our collections and the passion and commitment of our talented teams across the world."
Looking ahead, acting Chief Executive Lindsay Page said: "We have made a number of significant investments to ensure Ted Baker remains well positioned for long term development. We are excited by our Spring/Summer collections and the board remains focussed on identifying opportunities in the evolving retail market to further expand the brand."
Page took on her role after Kelvin first took a leave of absence and then resigned, due to allegations of sexual misconduct against him.
In December the former CEO was accused by Ted Baker's staff of unwanted kisses on the neck, massages and hugs at the company's London office. He denies the allegations but resigned from the company's board at the beginning of March.
Since then, Ted Baker hired law firm Herbert Smith Freehills to conduct an independent investigation into the allegations against Kelvin. The retailer expects the investigation to conclude in the second quarter of 2019.
The retailer concluded stating trading continues to be negatively impacted by "ongoing consumer uncertainty and an elevated level of promotional activity", but nonetheless, it remains confident in its outlook for the future.
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