10th Dec 2019 09:00
(Alliance News) - Embattled fashion retailer Ted Baker PLC on Tuesday chopped its full-year guidance, after disappointing Black Friday sales, suspended its dividend and announced the immediate departures of its executive chair and chief executive.
Shares in the company were down 15% at 337.87 pence each in London on Tuesday morning.
The once high-flying high street store chain downgraded its annual pretax profit guidance to a minimum GBP5 million and a maximum of GBP10 million. For the year ended this past January 26, the company had posted pretax profit of GBP50.9 million.
This followed "lower than anticipated margins and sell through" over November and the Black Friday period.
In the 17 weeks to December 7, revenue slipped 0.3% to GBP203.8 million, and 3.1% on an organic basis, removing the impact of acquisitions and disposals.
Ted Baker added: "We have continued to experience challenging trading conditions in the UK as a result of weak consumer spending, macro-economic uncertainty and a backdrop of elevated promotional activity."
The troubled firm expects difficult trading to continue in December and January.
The company 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.
"We are taking the necessary immediate actions to address underperformance and improve efficiencies across the wider group and are confident that these will return the group to a stronger position and continue the brand's long-term development."
Ted Baker is conducting a cost review in a bid to improve its efficiency and has temporarily suspended its dividend. The company said it will look to resume payment as soon as it is "appropriate to do so".
Ted Baker said CEO Lindsay Page has resigned with immediate effect, and Chief Financial Officer Rachel Osborne, poached from Debenhams PLC in September, has become acting CEO.
In addition, David Bernstein has stepped down as executive chair and Non-Executive Director Sharon Baylay has become acting chair. The company said it already is looking for a replacement for Bernstein.
Tuesday's dramatic announcements are the latest calamity to hit Ted Baker.
Page became CEO after a brief stint as acting chief executive after the firm's founder Ray Kelvin resigned from the post earlier this year.
Kelvin had taken a voluntary leave of absence in December last year, after he was accused by Ted Baker staff of forced "hugging" and inappropriate touching and comments.
Poor first-half trading has put even more pressure on the firm. In the six months to August 10, revenue slipped 0.7% year-on-year to GBP303.8 million from GBP306.0 million. Ted Baker slumped to a pretax loss of GBP23.0 million from a GBP24.5 million profit, on higher costs and exceptional items.
Last week, the company suffered yet another setback after it reported that it had overstated the value of its stock by as much as GBP25 million. Ted Baker however explained that that any adjustment to inventory would have "no cash impact and will relate to prior years".
By Eric Cunha; [email protected]
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