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Business

Ted Baker sales plunge, pandemic could keep UK stores shut until end May

Published by linker 5

Posted on February 11, 2021

Featured image for article about Business

By Tanishaa Nadkar

(Reuters) – Fashion brand Ted Baker said on Thursday it expects its UK stores to stay closed until the end of May due to coronavirus restrictions, as it reported a 47% fall in fourth-quarter revenue, citing lockdowns and weak Christmas demand.

“Looking forward, we are taking a cautious planning approach and now assume that UK stores will remain closed until the end of May followed by a gradual recovery over the rest of the first half,” Chief Executive Officer Rachel Osborne said.

The pandemic has been the latest blow for the struggling fashion retailer, which has been hit by multiple profit warnings, several management changes and an accounting scandal since founder Ray Kelvin stepped down as CEO in 2019 after misconduct allegations, which he denies.

Shares in the company, whose biggest shareholder is activist investor Toscafund Asset Management, were down 5.6% at 98.6 pence by 0939 GMT. They fell 67% in 2020.

“Ted Baker is facing the perfect storm. Its brand is synonymous with wedding-guest, occasion and workwear, which is not what people buy during a pandemic. Added to that is the group’s lack of presence in out-of-town retail parks, which is where footfall has shifted,” Hargreaves Lansdown analyst Sophie Lund-Yates said.

The company said its three-year transformation plan, which is focused on online operations, cost savings and revitalising the brand, was making good progress.

It also highlighted its new online platform which will be launched at the end of the first-quarter and announced a new licensing agreement with bed linen brand Bedeck.

Ted Baker said it expects Brexit-related incremental costs of up to 5 million pounds ($6.92 million). It earlier forecast a hit of around 16.1 million pounds on full-year profit under a worst-case scenario.

The company, which raised about 200 million pounds and cut 953 jobs last year to weather the coronavirus crisis, said it achieved cost savings of around 34 million pounds.

(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Krishna Chandra Eluri, Shounak Dasgupta and Susan Fenton)