Ted Baker CEO Lindsay Page resigns as profits slump
Ted Baker’s nightmare year just got much worse.
Shares in the fashion retailer plunged as much as 35% on Tuesday after the company slashed its profit outlook, suspended its dividend and announced the resignations of its CEO and executive chairman.
“The last 12 months has undoubtedly been the most challenging in our history,” the high-end London label said in a statement, citing difficult business conditions heading into the crucial holiday shopping period.
“The board has instigated an immediate action plan to improve the performance of the group,” it said.
The company said it now expects profit for 2019 of between £5 million ($6.6 million) and £10 million ($13.2 million) — a 90% drop from earnings guidance issued in June.
Shares in Ted Baker pared earlier losses to trade 13% lower in London. The stock is down 77% this year, reflecting the company’s struggle to deal with industry-wide challenges such as weak consumer spending and online competition.
Following years of strong profit growth, the company posted a 23% slide in earnings last year to £40.7 million ($53.7 million). In March, founder Ray Kelvin left abruptly after facing allegations of harassment, including “forced hugging.” Kelvin denies claims that he acted inappropriately.
Ted Baker’s problems mounted in October when it reported a loss for the first seven months of the year of £23 million ($30.3 million). It followed that last week with an admission that the value of its inventory had been overstated by up to £25 million ($33 million).
On Tuesday, the company suspended its dividend and announced that CEO Lindsay Page, who has been in the job for less than a year, had resigned. Executive chairman David Bernstein has also stepped down.
Page was appointed acting CEO in March after Kelvin’s departure. CFO Rachel Osborne has been appointed acting CEO, with the search for Page’s replacement to begin in January, Ted Baker said.
The company said independent consultants Alix Partners have been hired to conduct a “wide-ranging review” of its operational efficiency, costs and business model.
Promise in Asia, North America
Page joined the company in 1997 as finance director when it had just six shops in the United Kingdom and revenue of £14 million ($18.5 million). In 2018, it reported revenue of £617.4 million ($813.8 million) across 560 retail outlets worldwide. The company sells its clothing and accessories primarily in other stores, such as John Lewis in the United Kingdom and Nordstrom in the United States.
The British retailer said Tuesday that its performance in North America, where it has been expanding, has been strong. Sales in the United Kingdom and the rest of Europe, which account for the bulk of its revenue, were weaker. It also highlighted ongoing expansion in Asia, primarily through joint ventures in China and Japan.
