Ted Baker reported its first drop in yearly profit since the 2008 financial crisis as the fashion chain battled with tough retail conditions and sought to adapt to life without its founder.
Company founder Ray Kelvin resigned last month after an investigation, following an online campaign by some employees who asked for an end to “forced hugging” and “a culture that leaves harassment unchallenged”. Kelvin remains the biggest shareholder.
Shares in the group, known for suits, shirts and dresses with quirky details, were down 5.1 per cent at 1,620 pence in early trade, having hit their lowest since before a January boost from a reassuring Christmas trading update.
“The fashion house has been under pressure recently due to the tough trading environment, and the management shakeup might add to the existing uncertainty,” CMC Markets analyst David Madden said.
Baker said it was investigating its policies, procedures and the handling of staff complaints and would reach conclusions early in the second quarter.
“We are determined to learn lessons from what has happened and from what our employees have told us,” Chairman David Alan Bernstein said.
Ted Baker, which warned last month that yearly earnings would miss forecasts due to volatile exchange rates, higher costs and a write down on inventory, is also grappling with lower wholesale sales and broader sluggishness in the retail sector.
In the past year it also weathered a long and harsh winter in parts of Europe and North America, followed by an unusually hot summer.
Baker, which has about 560 stores and concessions globally, said group pretax profit fell 26.1 percent to 50.9 million pounds ($67 million) in the year ended Jan. 26, hurt by discounting in the face of stiff competition.
The lower profit was despite a relatively strong Christmas, helped by a surge in online sales.
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