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Ted Baker’s chief executive has resigned after less than a year in the job, as the clothing group suspended its dividend and warned its profits will tumble as much as 90 per cent during its “most challenging” year.
Shares in the group fell as much as 30 per cent in opening trade, valuing the group at just £124m.
Lindsay Page is leaving with immediate effect after 22 years at the company, while executive chairman David Bernstein is also departing, Ted Baker said in a statement on Tuesday.
Mr Page was promoted to the chief executive role in April of this year following allegations about former boss Ray Kelvin’s conduct. He had been working in the role on an interim basis since December.
“The last 12 months has undoubtedly been the most challenging in our history,” the company said.
Chief financial officer Rachel Osborne has been named interim chief executive, as the company embarks on a search for a new leadership team. Sharon Baylay has assumed the role of acting chair.
Ms Osborne only joined the company in November, having worked at Debenhams and Domino’s pizza, but has already instigated a review of inventory practices after discovering an overstatement of past years’ stocks.
Ted Baker has also forecast pre-tax profits of between £5-10m for the year ending January 25, dependent on Christmas trading. After the half-year results in October, analysts had been expecting a figure of over £20m. In the previous fiscal year, the group generated earnings of £50.9m.
The group has suspended its dividend following weak sales over November and the key Black Friday period — having already cut the interim payout from 17.9p to 7.8p — and warned it expects difficult trading to continue.
Retail sales fell 4.8 per cent for the 17 weeks to December 7, while revenue decreased 3.1 per cent to £203.8m, when stripping out the impact of acquisitions and currency fluctuations.
“The board recognises that dividend is an important part of our returns to shareholders and will look to resume payment as soon as it is appropriate to do so.”
Outgoing boss Mr Page said: “Ted Baker continues to be a very strong global brand and I wish Rachel Osborne and the rest of the team every success in achieving further growth.”
The company has endured a catalogue of woe since the allegations about Mr Kelvin’s behaviour first emerged late last year. It has issued a total of four profit warnings since then.
Last week it appointed consultants AlixPartners to lead a review of costs and purchasing.
House broker Liberum said that even before the latest drop, the share price ascribed no value to the business beyond its inventory and the freehold of the company’s London headquarters, known to Ted insiders as “the ugly brown building”.
It added that the company’s banks do covenant tests every quarter, suggesting that the asset review may need to be completed by the end of the financial year in January 2020.
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