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Fashion retailer Ted Baker has issued its second profit warning this year, and anticipates underlying profit before tax for the year ending 25 January 2020 to be in the range of £50m to £60m.
Shares plummeted by nearly 25% in early trading today (11 June), and the retailer said “ongoing” consumer uncertainty in a number of key markets and elevated levels of promotional activity across its global markets resulted in “extremely difficult” trading conditions during the financial year to date.
Its board also 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.
Group revenue for the 19 week period from 27 January 2019 to 8 June 2019 increased by 3.8% (1.9% in constant currency), compared with 4.2% reported during the same period last year.
It said the performance reflected “difficult and unpredictable” trading conditions, unseasonable weather experienced across North America in the early part of the period and the highly promotional retail environment across its global markets.
Total retail sales including e-commerce decreased by 0.3% during the period (1.8% decrease in constant currency) and average retail square footage rose by 5.3% to 443,036 sq.ft (2019: 420,779 sq.ft).
CEO Lindsay Page said: “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.
“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. We are relentlessly focused on achieving cost efficiencies as well as further cost savings throughout the business.”
She added: “We remain committed to the long-term development and expansion of Ted Baker as a global lifestyle brand. Over recent years, we have made a number of significant investments to ensure that the group is well positioned to continue to adapt to structural changes in the retail sector.”
In March Ted Baker’s founder Ray Kelvin resigned from his position as CEO and director of the fashion retailer, amid allegations of misconduct. The retailer launched an investigation into harassment allegations against Kelvin in January of this year, after reports claimed he hugged workers and kissed their necks and ears.
