(Business) – Ted Baker plans to raise 95 million pounds by selling new shares to help it ride out the coronavirus crisis, the fashion brand said on Monday, as it slumped to an annual loss.
Shares in the company, known for suits, shirts and dresses with quirky details, fell as much as 24% in early trade, taking losses for this year to more than 70%.
It is the latest British firm to seek cash from shareholders as the coronavirus pandemic plunges the economy into recession, following the likes of office provider IWG, events guide specialist Time Out and caterer Compass.
Even before the crisis, Ted Baker was struggling to recover from setbacks including an accounting scandal, profit warnings and management change after founder Ray Kelvin stepped down amid misconduct allegations, which he denies.
New Chief Executive Rachel Osborne, a former manager at department stores group Debenhams, laid out a transformation plan on Monday including cost savings and a shift towards online sales. Analysts say Ted Baker has struggled to hold onto customers amid online competition from the likes of Boohoo.com.
The company plans to gradually reopen stores – closed since a lockdown to contain the virus pandemic in late March – from the middle of this month, in line with government guidance.
For the year ended Jan. 25, Ted Baker made a pretax loss of 79.9 million pounds, compared with a profit of 30.7 million in the prior year. Total revenue fell 1.4% to 630.5 million pounds.
Revenues also slumped 36% for the 14 weeks from Jan. 26 to May 2.
“The Board recognises that last year’s performance was disappointing for all of Ted Baker’s stakeholders, reflecting a challenging external environment as well as significant internal disruption, driven by a number of senior leadership departures,” the company said.
(Photos syndicated via Reuters)