Scottish-founded Ted Baker warns over profits
Troubled retailer Ted Baker - the British fashion label with Scottish roots - has warned over profits as sales slumped amid "extremely difficult" trading and woes with its spring and summer ranges.
The fashion brand - whose founder, Ray Kelvin, left in March following allegations of harassment - said underlying annual pre-tax profits are now expected in the range of £50 million to £60m for the year to January 25 2020.
The alert came as it reported a 2.6 per cent drop in like-for-like retail sales, on a constant currency basis, for the 19 weeks to 8 June.
Wholesale comparable sales slumped 3.6 per cent with currency effects stripped out.
The profit gloom for Ted Baker, which was founded as a single shirt shop in Glasgow in the late 1980s, comes after it posted a 26.1 per cent slump in pre-tax profits to £50.9m for the year to 26 January, having warned over the result in February.
The group blamed the latest trading troubles on "difficult and unpredictable" conditions, as well as unseasonable weather in the US and intense discounting across its global markets.
But it also admitted the group had "experienced some challenges" with its spring/summer collections, which it claimed have now been addressed.
It said: "Ongoing consumer uncertainty in a number of key markets and elevated levels of promotional activity across our global markets have resulted in extremely difficult trading conditions during the financial year to date.
"The board anticipates some of these external factors will continue to impact trade for the group and its trading partners across the remainder of the financial year."
Ted Baker's new boss, Lindsay Page, added that the group is now "relentlessly focused" on cutting costs to offset the trading difficulties.
She said: "As a team, we are proactively addressing the challenges we face as an industry.
"Several of our new product initiatives will commence imminently and we are confident in our collections for the coming season."
It comes after 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.
An investigation concluded in April, finding "several areas for improvement" in the clothing retailer's HR practices.
As a result, Ted Baker said it had launched a "refresh of its HR policies to ensure their alignment with current best practice", but refused to comment on the specific allegations against Kelvin.