LONDON — Ted Baker’s share price closed down 13.4 percent on Tuesday after the high-street brand issued its third profit warning this year and announced a major board shakeup following an investigation into irregularities on its balance sheet.
The share price, which deteriorated throughout the day, closed at 3.46 pounds.
The brand, which saw its founder and part owner Ray Kelvin quit under a cloud, said David Bernstein has stepped down as executive chairman with immediate effect, while company veteran Lindsay Page has resigned as chief executive officer.
Sharon Baylay has assumed the role of acting chair until a permanent successor is appointed, while Rachel Osborne has agreed to become acting ceo with immediate effect.
The company said Page would assist with an orderly transition of his role and the search for a new ceo will commence in January.
The company said, based on preliminary analysis, the board estimates an impact on value to range from 20 million pounds to 25 million pounds, but the error will have “no cash impact and will relate to prior years.”
The company has since called in Deloitte to investigate the irregularity.
Page, who has been with Ted Baker since 1997, had only just assumed his ceo role after Kelvin stepped down earlier this year, following allegations of inappropriate behavior and treatment of staff, which he denies.
The company also said it is expecting profit before tax in the fiscal year ending Jan. 25, 2020, to range from 5 million pounds to 10 million pounds, “dependent on Christmas trading and final year-end review.”
Ted Baker said trading in November and the Black Friday period was below expectations, with lower than anticipated margins and sell-through.
It also said difficult trading conditions will continue, “and therefore it is appropriate to take a more cautious outlook for the remainder of the financial year, which includes the key trading months” of December 2019 and January 2020.
“The last 12 months has undoubtedly been the most challenging in our history, yet the Ted Baker brand remains well supported by our customers, partners and trustees and we appreciate their ongoing support,” the company said Tuesday. “We are taking the necessary immediate actions to address underperformance and improve efficiencies across the wider group and are confident that these will return the group to a stronger position and continue the brand’s long-term development.”
The company will be undertaking a cost review, an asset review, and will immediately suspend dividends in the wake of the third-profit warning.
In the 17 weeks to Dec. 7, group revenue decreased 3.1 percent to 203.8 million pounds on a reported basis and 3.9 percent at constant currency.
The company cited “challenging trading conditions in the U.K. as a result of weak consumer spending, macro-economic uncertainty and a backdrop of elevated promotional activity.”