Ted Baker has conducted a review of its operational efficiency, costs and business model after a “very challenging year”, resulting in 102 redundancies.
It has also resulted in the removal of a further 58 job posts that are currently vacant. The roles are largely across head office and other main business functions.
Ted Baker has around 750 head office staff and 3,700 employees in total.
It comes after it was reported earlier this week that Ted Baker is looking to sell its London headquarters to help boost its balance sheet amid an accounting crisis.
On 10 December 2019, Ted Baker announced several actions focused on addressing underperformance and improving efficiencies across the wider group. Since that announcement, the group’s management team has conducted a wide-ranging review of Ted Baker’s operational efficiency, costs and business model.
In conducting the operational review of the business, the management team has identified key strategic priorities. These are: customer focus – increasing sales through ”broadening and deepening Ted Baker’s customer relationships”; brand revitalisation – “re-energising” the Ted Baker brand and creativity of the Group; product line extension – improving product relevance and broader product lines; ecommerce growth – enhancing Ted Baker’s ecommerce proposition; channel optimisation – territorial expansion driven by channel economics; and cost efficiency – “end-to-end operating margin improvement and the efficient use of capital”.
The management team’s operational review has run alongside the cost review that restructuring firm AlixPartners has been working on. The cost review has now concluded.
Ted Baker said in a statement: “A key area of focus for management following the cost review is to reduce our office cost base, in particular by simplifying and de-layering the group’s organisational structure. Earlier this month, the executive committee was restructured, with the number of members reduced from 13 to 9. The group has today announced proposals to reorganise key head office and business functions to align with the new simplified management structure.”
The company said the expected financial impact from this initiative will be to reduce costs by £5m in the current financial year, and by £7m on an annualised basis. The savings will incur a cash restructuring charge of £2.7m, which will be taken in the current year.
“2019 was a very challenging year for Ted Baker, but I am confident about the future growth prospects for the group”, acting chief executive officer, Rachel Osborne, said. “The strategic priorities we are announcing today will re-energise the Ted Baker brand and improve our customer proposition, ensuring the long-term success of the business. We recognise that to support these priorities we need to become more efficient, simplify our structure and reduce our cost base to more sustainable levels for the future.
“The changes we are announcing today are difficult because colleagues across the business have been working hard in what has been a challenging period for Ted Baker. I would like to thank all of them for their commitment and the passion they have shown for the business. The board and I believe that we will only realise Ted’s long-term potential by transforming the way the business operates and the actions we are announcing today are important steps in that transformation.”
Further details of the group’s strategic priorities and transformation programme will be detailed in full at Ted Baker’s full-year results, which are expected in May.