Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

UK's Ted Baker cuts jobs as losses balloon and Brexit looms

Published 07/12/2020, 07:42
Updated 07/12/2020, 09:16
© Reuters. Rain drips off a sign on a Ted Baker sign on a store in London, Britain
TED
-

By Yadarisa Shabong

(Reuters) - British fashion retailer Ted Baker (LON:TED) cut 953 jobs as coronavirus lockdowns sent first-half losses soaring, it said on Monday, warning of the potential for further pain from a no-deal Brexit as the European Union divorce deadline looms.

Retail stores have been hit hard by coronavirus restrictions and closures, with job losses running in the thousands, while the looming end to Britain's Brexit transition period threatens to disrupt the flow of goods through UK ports unless a new trade deal can be agreed before the end of the month.

Philip Green's Arcadia retail group last month became the biggest corporate casualty of the pandemic so far and Debenhams is set to shut up shop after 242 years.

"Even with some of our legacy issues being amplified by COVID-19, our balance sheet is materially stronger than we had envisaged this early in the plan and operational cash flow will be positive for the full-year," said Ted Baker Chief Executive Rachel Osborne.

The coronavirus crisis compounded difficulties for the company, which has been hit by profit warnings, management changes and an accounting scandal since founder Ray Kelvin stepped down as CEO in 2019 after misconduct allegations, which he denies.

Ted Baker has overhauled its management team this year and raised about 95 million pounds ($126 million) in equity to bolster its pandemic-hit finances.

Its three-year turnaround plan is expected to deliver 31 million pounds in annual savings, up from the previously targeted 27 million pounds, the company said on Monday.

With Britain's full exit from the European Union only weeks away and a trade deal still hanging in the balance, Ted Baker warned that, in a worst-case scenario, full-year profit could take a 16.1 million pound hit.

Ted Baker, known for suits, shirts and dresses with quirky details, said its pretax loss widened to 39 million pounds in the six months to Aug. 8, against 2.7 million pounds a year earlier.

© Reuters. FILE PHOTO: Shoppers walk past a Ted Baker store on Regents Street in London

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.