Home Business News Ted Baker to report a drop in profits

Ted Baker to report a drop in profits

by Sarah Dunsby
15th Mar 19 1:08 pm

Ted Baker are to report a drop in their annual profits on Thursday, the fashion retailer has faced challenging high street conditions and higher costs.

The company gave a profit warning in February, pre-tax profits for the financial year to 26 January 2019 are expected to drop to £63m compared to consensus estimates of £73.8m

The company posted an annual profit before tax of £68.8m for 2018.

The retailer has been hit with foreign exchange movements and has affected profit by almost £2.5m.

The fashion retailer has also been hit with a scandal surrounding the workplace culture and the alleged conduct over Ray Kelvin, the founder and former boss.

Last week Kelvin stepped down amid accusations that there was “forced hugging” culture, some staff complained their ears had been massaged, or were asked to sit in his lap, it has been alleged.

A research analyst for Cantor Fitzgerald Mark Photiades, said last week the fashion retailer had experienced an “annus horribilis.”

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown said, “The decline in profits is being driven by one-off events, and Kelvin’s departure comes as he’s investigated for misconduct.

“Disruptive for sure, but investors will hope Ted’s long-term projects aren’t impacted.

“Despite increasing competition, we think sales will still be moving in the right direction. The question will be if that’s coming at the expense of profitability.

“Discounting means margins could be under pressure, and it’s important these aren’t pushed too far.”

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