Ted Baker shares plunge as it suffers £23m first-half loss

Shares in Ted Baker crashed by more than a third after the fashion retailer dived to a first-half loss and issued another warning on its full-year performance.

The company said trading in the first half had been worse than expected and the second half had started slowly because of an unseasonably warm September.

The shares tumbled 38% to 575p after the warning, the group’s third this year.

Sales fell 2.5% to £303.8m in the six months to 10 August, as the group fell £23m into the red against a £24.5m profit last time.

Profits were partly affected by a £2m cost of an investigation and “legal matters” relating to allegations of misconduct by the former chief executive Ray Kelvin who stepped down in March.

The company said it had made a number of changes to its global HR policies, procedures and governance and training after the investigation following staff allegations of “forced hugs” and ear-kissing last year.

Ted Baker said its trading performance reflected “very difficult trading conditions” throughout the period including unseasonable weather in north America in the spring and “unprecedented and sustained levels of promotional activity across the sector globally”. Profit margins were hit as it said it had been forced to cut prices because of competition from “distressed discounting from brands that are fighting for survival.”

The company said it had also suffered from difficulties at key UK trading partners, including Debenhams and House of Fraser, as well as problems with Ted Baker’s own ranges in the spring. Womenswear sales fell 1.5% or 5.9% excluding footwear.

Lindsay Page, the chief executive, said: “We are continuing to pro-actively manage the significant challenges impacting our sector including weak consumer spending, macro-economic uncertainty, and the accelerating channel shift towards e-commerce. However, we are not immune to these pressures which have impacted our financial performance during the first half of the year.”

Despite the challenges, Page said he remained confident in Ted Baker’s ability to further develop because of the strength of the brand and its wide distribution both online and offline.