Ted Baker is to cut 160 jobs as the fashion retailer struggles with declining sales, profits and a £58 million accounting error.
The company said actions to reduce costs following a review would centre on its office functions, and see 102 office staff lose their jobs. On top of that, a further 58 currently vacant positions will remain so. Store employees are currently unaffected by these changes.
Cuts to save £7 million annually
The cuts are expected to save £5 million in the current financial year, and £7 million annually.
Ted Baker’s market value has tumbled by more than 80 per cent (from £830m to £140m) in the past year. The company now aims to “simplify and delayer” its structure.
Last year, the company received another blow as Ray Kelvin, the founder and former chief executive, resigned following allegations of “forced hugs” at the company. He has denied allegations of misconduct.
Ted Baker said the announced reduction in its office headcount is “the first of a range of expected initiatives to improve the efficiency and cost structure of the group”.
Challenging period for Ted Baker
Acting chief executive Rachel Osborne said in a statement, “2019 was a very challenging year for Ted Baker, but I am confident about the future growth prospects for the group. The strategic priorities we are announcing will re-energise the Ted Baker brand and improve our customer proposition, ensuring the long-term success of the business.
“We recognise that, to support these priorities, we need to become more efficient, simplify our structure and reduce our cost base to more sustainable levels for the future.
“The changes we are announcing are difficult because colleagues across the business have been working hard in what has been a challenging period for Ted Baker.”
The company, which employs 3,700 staff globally, said further cost and efficiency plans would be announced.
Ted Baker has 560 stores and concessions worldwide - 201 in the UK, 122 in Europe, 130 in North America, 98 in the Middle East, Africa and Asia, and nine in Australasia.
Shares in the company fell 1.5 per cent to 309.6p on Wednesday morning (26 Feb).