Its hard to know whats worst: a profit warning, a dividend suspension, or another chief executive disappearing within nine months?
Thats what markets are mulling over at Ted Baker plc (LON:TED), with the three announcements on Tuesday spelling the departure of chief executive Lindsay Page and executive chairman David Bernstein, resigning thanks to a black hole found in the fashion firms accounts.
On top of this, the firm warned that profits could fall 90% this year.
Russ Mould, investment director at AJ Bell, said: “If you thought Julian Dunkerton had a big challenge in trying to reset fashion retailer Superdry, imagine what it will take to sort out Ted Baker. It seems there is a complicated web of problems to navigate before trying to establish exactly whats gone wrong.”
Ted Baker had seemed almost untouchable until the last year.
The lower-end-of-luxury fashion retailers shares have been tumbling ever since, losing 78% overall as they struggled to recover after the departure of its founder and former chief executive Ray Kelvin over misconduct allegations in March.
Kelvin, who founded the chain in Glasgow in 1988 and owns a 35% stake in the business worth more than £300m, was credited by one analyst at a broker as “having a lot of control over the brand, and being the main visionary for the entire business”.
Lindsay Page, who stepped up as chief executive in March and has since resigned, was seen as Kelvins right-hand man, and so questions were raised from the start over his ability to take over from Kelvin effectively.
“Theres something very difficult to articulate about why Ted Baker works,” said the analyst, “because a lot of people look at the price point and cant see who the target customer is”.
The analyst added that Kelvins return would be “very positive” for the business, as it would bring some direction back to Ted Baker, but it is “difficult to see how he would without taking the company private”.
After share prices plunged 65% over 12 months and Superdrys demotion from the FTSE 250, Dunkerton fRead More – Source