Troubled retailer Ted Baker has seen its crisis deepen after warning over profits once again and revealing the immediate departure of its chief executive and chairman.
Shares in the group plummeted to 16-year lows after it revealed chief executive Lindsay Page quit and bemoaned the “most challenging” 12 months in its history.
The fashion firm – whose stock fell more than another 30% at one stage – has now seen more than three quarters of its stock market value wiped off since January, sparking speculation over opportunistic takeover bids.
Mr Page – who only took over from founder Ray Kelvin after he quit in March – has been replaced on an interim basis by finance director Rachel Osborne.
Ted Baker has also kicked off the search for a new chairman after David Bernstein stepped down.
Sharon Baylay has been hired as acting chair. The resignations were announced as Ted Baker scrapped its shareholder dividend payout and said it is now expecting annual pre-tax profits of between £5 million and £10 million after worse-than-expected trading in November and over Black Friday.
This compares with pre-tax profits of £50.9 million the previous year.
Its trading troubles were laid bare as figures revealed a 5.5% drop in retail sales with currency effects stripped out for the 17 weeks to December 7.
Ted Baker said: “The last 12 months has undoubtedly been the most challenging in our history.”
It confirmed it has hired consultants Alix Partners to carry out a review of the group’s operational efficiency, costs and business model as part of an urgent recovery plan.
The firm already began a review of its assets in October, which is ongoing.
It sees Ted Baker’s woes worsen after bosses last week revealed they had uncovered that the group’s inventory had been overstated by between £20 million and £25 million, sparking another shares tumble.
Shares in the firm have been decimated after a year which has seen it post four profit warnings and lurch from crisis to crisis.
The firm came under significant pressure after founder and chief executive Mr Kelvin resigned from the company in March following allegations of inappropriate behaviour towards staff.
Mr Kelvin had already taken a step back from activities at the business in December 2018 after allegations of misconduct involving “forced hugs” and ear-kissing.
Mr Kelvin has denied any wrongdoing.
But there is mounting speculation that Mr Kelvin, who still owns 35% of the company, may be among those eyeing a possible takeover.
Russ Mould, AJ Bell investment director, said: “Some shareholders may now be hoping (or even praying) for a bid to put the company out of their portfolio’s misery.”
He added that while Mr Kelvin is being seen by some as a “logical buyer”, bidders may find the numbers “not quite so glaringly tempting when you dig behind them”.