Ted Baker to report lower profits after ‘difficult’ year
Ted Baker is set to report a decline in annual profits on Thursday following a tough year for the fashion brand which has seen the departure of its founder, higher costs and challenging high street conditions.
Following a profit warning at the end of February, pre-tax profits for the financial year ended January 26 2019 are expected to be £63 million, compared with previous consensus estimates of £73.8m.
Last year the company’s annual profit before tax was £68.8m.
Foreign exchange movements have affected profit by around £2.5m, primarily due to the change in the pound’s value versus the dollar and euro.
Upgrades to the group’s systems have also cost approximately £2.5m, while transitions in Asia and the US resulted in a £5m writedown in the value of inventory stock.
Meanwhile the scandal surrounding the group’s workplace culture and the conduct of its founder and boss Ray Kelvin have resulted in a change in leadership after 30 years.
Mr Kelvin stepped down last week after accusations that a “forced hugging” culture existed at the company, while some staff members complained that he had massaged their ears or asked them to sit on his lap.
Mark Photiades, a research analyst at Cantor Fitzgerald, said last week that Ted Baker had experienced an “annus horribilis”.