Ted Baker blames 'extremely hard trading' for profit warning

Marco Green
June 11, 2019

Ted Baker shares lost more than a quarter of their value on Tuesday after the British fashion retailer warned that underlying profit for the year would fall short of analysts' estimates after an "extremely difficult" start to 2019.

The company complained of "unseasonable weather" across North America and a "highly promotional" sales environment as it said profits for the year ending January 2020 were likely to be between £50m and £60m.

Shares of the retailer, which fell 43% past year, were down by a quarter in the first few minutes of trading.

Ted Baker said gross margins in both its wholesale and retail businesses were lagging compared with past year, blaming "elevated levels of promotional activity". The shares fell 43 per cent previous year and had lost another 14 per cent in 2019 before Tuesday's opening.

According to IBES data from Refinitiv, market analysts had been expecting profit before tax of £72.40m.

The group blamed the latest trading troubles on "difficult and unpredictable" conditions, as well as unseasonable weather in the USA and intense discounting across its global markets.

It comes after Mr Kelvin - the former chief executive and founder - left the company following a raft of accusations, including that he enforced a "hugging" culture at the company, massaged employees, kissed their ears and asked some to sit on his lap.

Known for selling suits, shirts and dresses with quirky details and bright, block prints, Ted Baker said it had faced some challenges with its spring and summer collections.

"Ted Baker remains an outstanding brand and, underpinned by the strength of our flexible business model, including a relatively low number of own stores that showcase the brand, we remain confident in our long-term growth prospects", Page said in a statement.

Ted Baker CEO Lindsay Page, who replaced Kelvin in April, said that the retailer was now "relentlessly focused on achieving cost efficiencies as well as further cost savings throughout the business".

Other reports by Click Lancashire

Discuss This Article