Chairman and CEO quit troubled fashion chain Ted Baker
The fashion group has had a year to forget
Troubled fashion chain Ted Baker has announced that its chairman and chief executive have resigned and that it has reduced its full-year trading outlook.
Executive chairman David Bernstein has stepped down with immediate effect. Sharon Baylay has assumed the role of acting chairman until a permanent successor is appointed.
Lindsay Page, who was appointed CEO in April, will be replaced as acting chief executive by chief financial officer Rachel Osborne.
Shares in the company plunged 25% at today’s opening to 287.8p. Its third profit warning comes on the back of a dismal Black Friday performance despite heavy discounts. Oline sales fell by 0.7% and shops sales were down 5.7%.
The resignations come at the end of a turbulent year for the company which last week appointed a law firm to advise on how it tackles an overestimation of its stock.
The company discovered the inventory valuation on its balance sheet had been overstated by between £20 million and £25m.
It has appointed Freshfields Bruckhaus Deringer to undertake a comprehensive review and will appoint independent auditors. KPMG has audited its accounts for nearly 20 years.
Shares in Ted Baker hit a ten-year low, down 83% since January, with the company now valued at £163m.
It is the second time the company has called in external investigators this year, after founder Ray Kelvin was forced to resign as chief executive in March following a ‘forced hugging’ scandal.
Mr Page has offered to support a number of ongoing initiatives and assist an orderly transition of his role. The search for a new CEO will commence in January.
He joined the Group in 1997 from Arthur Andersen prior to the company’s IPO. At that time Ted Baker had six shops and one concession in the UK and a turnover of £14m.
In a statement, the company said: “Alongside the brand’s founder, Ray Kelvin, he has played a key role in Ted Baker’s expansion into a truly international brand with a presence in 50 countries.
Mr Page commented: “I would like to thank everyone at Ted Baker whom I have had the pleasure of working with since 1997. In particular, I am grateful for the team’s support over the last 12 months.
“I would also like to take this opportunity to thank Ray Kelvin for the opportunity he gave me 22 years ago to join this fantastic brand and help to achieve his vision of creating a truly international business. I am very proud of everything the team at Ted Baker has achieved together.
“Ted Baker continues to be a very strong global brand and I wish Rachel Osborne and the rest of the team every success in achieving further growth.”
The firm said it was reducing its full-year trading outlook “to a minimum profit before tax of £5m, with a potential outcome of up to £10m dependent on Christmas trading and final year-end review”.
AJ Bell investment director Russ Mould said: “Ted Baker is truly having the nightmare before Christmas. Following the departure of its founder Ray Kelvin, several profit warnings and a £25 million inventory blunder, along comes another shocking trading update, the departure of CEO Lindsay Page and chairman David Bernstein and the suspension of the dividend.
“Page’s days were already looking numbered given the inventory blunder related to prior years when he was finance director.