Ted Baker bosses resign from crisis-hit fashion brand
GENEVA: Ted Baker Plc's top management quit and the UK fashion chain suspended its dividend, triggering a plunge in the shares to the lowest since 2003.
The power vacuum leaves Ted Baker floundering as it tries to contain the fallout from allegations against its founder, Ray Kelvin, and the overstatement of unsold goods.
The shares fell as much as 36% as the retailer forecast a drop in pre-tax profit of as much as 90%.
Chairman David Bernstein and interim chief executive officer Lindsay Page resigned, and recently-appointed chief financial officer Rachel Osborne becomes acting CEO with immediate effect.
"Ted Baker is rudderless at a time when the business badly needs a steady hand," wrote Michael Hewson, an analyst at CMC Markets. "The new CEO probably feels she's just stepped into the middle of a storm-force hurricane."
The latest warning shows that the retailer has yet to come to grips with the crisis as consumers who once snapped up its stylish, quirky looks turn elsewhere.
Kelvin abandoned the CEO position in March after allegations he gave employees unwanted hugs and asked female staff members to sit on his knee.
Osborne, 54, joined in September after serving as CFO at department-store operator Debenhams Plc. She's a chartered accountant with a strong background in retail, having worked at companies including Domino's Pizza Group Plc, John Lewis and Kingfisher Plc.
Independent board member Sharon Baylay will be acting chairman until a replacement is found.
"There's a lot to do to steady the ship," wrote Andy Blain, an analyst at Panmure Gordon & Co, who withdrew his hold recommendation on the stock.
He said that rating had been based purely on the potential for the company to be taken private.
Ted Baker said it hired Alix Partners as consultants to review how it could cut costs. The company also began a review of its assets in October.
Outgoing CEO Page had been Ted Baker's CFO since 1997 and became chief operating officer in 2014.
Sales in the 17 weeks through Dec 7 fell 3.9% on an adjusted basis, and the company said its gross margins are below expectations on increased discounting.
Ted Baker said pre-tax profit might decline to as little as £5 million ($6.6 million) this year. "The last 12 months has undoubtedly been the most challenging in our history."