There has been another flash sale at Ted Baker with the fashion brand offering up to 35% off on Tuesday. The deal wasn’t available on its clothes though … it was on the company’s already bombed-out share price.
Things are going from bad to worse at the former stock market darling. It has been in freefall since its founder Ray Kelvin was forced out last year after being accused of presiding over a regime of “forced hugs” and harassment. Its shares, which were changing hands for £21 in January, have since lost 83% of their value after four profit alerts. Now the company has warned profits could be just £5m this year – 10% of last year’s haul.
So the chairman and chief executive are out. Rachel Osborne, who only arrived as its finance chief last month, and is now the acting chief executive.
The big question though is can Ted Baker recover? It has an “action plan” that includes a cost-cutting drive and probably a sale and leaseback of its head office. The retailer might be able to patch up its finances but what about its appeal to shoppers? The company’s claim that it is still “well supported by customers” is laughable; they are practically giving their clothes away.
With its quirky style Ted Baker used to defy gravity in a sea of fashion mediocrity but it has come down to earth with a bang. The shares recovered a little later in the day, showing there are still believers. But is that faith linked to hope of a Kelvin rescue bid? If so there are big hurdles to overcome. The fashion entrepreneur would need to find a thick-skinned backer and dig into his own pockets, which are not as deep as they used to be; his 35% stake was worth more than £500m four years ago but today is worth just over £50m.