// Ted Baker warns annual profit could fall by 20 per cent
// Fashion retailer cited “extremely difficult trading conditions” behind drop
// Group is currently undergoing HR revamp after allegations made against founder Ray Kelvin
Ted Baker told investors on Tuesday that it expects annual profits to fall by as much as 20 per cent amid “extremely difficult trading conditions”.
The fashion retailer issued a profit warning after group revenue fell 1.1 per cent on a reported basis, down 2.9 per cent at constant currency in the 19 weeks to June 8.
Retail revenue dropped 1.1 per cent and wholesale sales declined 1.2 per cent. At constant exchange rates, retail and wholesale revenue fell 2.6 per cent and 3.6 per cent, respectively.
Ted Baker blamed weaker trading on unseasonable weather in North America and a highly promotional retail environment across its global markets, which led to lower gross margins.
The fashion retailer now expects underlying profit before tax in the range of £50m to £60m in the year ended 25 January 2020. This compares with a pre-tax profit excluding exceptional items of £63m posted in its last full year.
Ted Baker said it would control costs and introduce new products and improve efficiency from sourcing and its supply chain to mitigate the poor sales.
“As a team, we are proactively addressing the challenges we face as an industry,” said chief executive Lindsay Page.
“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.”
The warning comes as the retailer finds itself in the midst of an HR policy overhaul after founder and former chief executive Ray Kelvin resigned in early March due to sexual harassment allegations.
Since Kelvin’s alleged misconduct and resignation, Ted Baker has pledged to revamp its HR policies following an internal investigation by law firm Herbert Smith Freehills.