“It’s a very sad day for the industry”, sources told Drapers, as Ted Baker veteran and CEO Lindsay Page quits amid another profit warning.
Earlier today, Page, who joined the group in 1997, resigned as CEO of the premium retailer with immediate effect. He will be replaced by Rachel Osborne as acting chief executive officer. In a statement, the business said the search for a permantent replacement would begin in the new year.
Executive chairman David Bernstein also stepped down with immediate effect. Sharon Baylay has assumed the role of acting chair of the board until a replacement is found.
The departures cap a turbulent year for Ted Baker: founder and former chief executive Ray Kelvin resigned in March following allegations about his workplace conduct, and it has issued a string of profit warnings, including one this week.
Page said in a statement: ”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.”
A long-term supplier and partner of Ted Baker told Drapers: “It’s a very sad day for the industry. It’s just awful. Lindsay and Ray were a double act: it wasn’t about one man. The fact they’ve now both gone is very sad.
“Ray was as an exceptional [retailer] and, with Lindsay by his side, they were a great team, just like John Morley [Paul Smith MD] is to Paul Smith. Every business needs a yin and a yang.”
He added: “Ted Baker now needs to get somebody in quickly to help get the business back on track. There has to be no stone unturned to get the business back into place.”
Retail analyst Richard Lim said: “This is a sign that there are cracks appearing in the highest level of the business. There’s likely to be some friction between board members. A lot of that disruption is filtering through the business to the company’s operations.”
Ted Baker now expects pre-tax profits for the year to January 2020 to be between £5m and £10m, down from £63m in 2018/19. In a trading update, it announced that group revenue had fallen 1.2% on a constant-currency, on a reported basis for the 17 weeks to 7 December.
Last week, it was reported that Ted Baker had appointed consultancy firm AlixPartners to conduct an in-depth review of its operations, and is also carrying out an independent review into an error that resulted in it overstating the value of its inventory by up to £25m.
Ted Baker also issued a string of profit warnings this year and swung to a pre-tax loss of £23m for the 28 weeks to 10 August 2019. It made a profit of £24.5m during the same period in 2018.
Sources believe it will be a “long road to recovery” for Ted Baker, but are confident the business can make a comeback.
A source close to the retailer said: “Ted Baker has issued a profit warning before Christmas, which is not ideal. It’s never a good sign. It’s a sad day, but Ted Baker can be turned around.”
He said the company needs to get rid of many of its stores, of which it currently has “too many”.
Emily Salter, retail analyst at GlobalData, said: “Ted Baker must address its waning popularity, by attracting back its loyal shoppers and innovating instore and online to make the shopping experience more exciting.”
She added: “It will be a long road to recovery for Ted Baker, and it must focus on reviving previous demand for the brand and reducing its reliance on discounting to boost sales.’’