Shares in fashion brand Ted Baker (TED.L) crashed 35% on Thursday after the company swung to an unexpected loss and issued its third profit warning of the year.
Ted Baker’s half-year results, released on Thursday, show the retailer lost £23m before tax in the six months to the end of August, compared with a profit of £24.5m in the same period last year. The slump in earnings comes despite revenue shrinking by just 0.7% to £303.8m. Retail sales fell by 2.5% to £214.5m.
Chief executive Lindsay Page blamed the poor performance on “weak consumer spending, macro-economic uncertainty, and the accelerating channel shift towards e-commerce.”
“We remain actively focussed on cost control and driving further efficiencies,” Page said in a statement. “Despite the structural challenges and cyclical pressures on the industry, we remain confident in Ted Baker's ability to navigate the market and further develop as a global lifestyle brand.”
The scale of the half-year loss was unexpected despite profit warnings in March and June. The results also came with another profit warning, as Ted Baker warned that trading for the second half of the year “has started slowly” and results will be “below that of last year” unless things pick up.
The worse-than-expected results and warning about current trade sent the share price crashing to a 9-year-low.
Ted Baker has been struggling since the departure of founder Ray Kelvin in March over allegations of forced hugging and harassment. However, Russ Mould, investment director at AJ Bell, said the updated shows “the retailer’s problems run deeper than just boardroom turmoil.”
“The company’s own e-commerce sales actually sank in the period when typically online business comes to the rescue in the retail and fashion sphere,” Mould said. “And the company was hit by additional costs associated with its acquisition of retailer No Ordinary Shoes.
“The latest collapse in the share price may help revive speculation over a potential move by Kelvin to take the business out of the glare of public markets through a private equity-backed buyout.”