Ted Baker seeks funding for new strategy after £80m loss

Ted Baker has announced a major new strategy shaped by a “digital first” mentality, after reporting an annual loss of £80 million.

The fashion retailer and brand said it intends to raise approximately £95 million by selling new shares in the company, and it is embarking on a fresh growth drive underpinned by those funds and led by a recently-installed new senior team.

Its first task is to stabilise the company following a turbulent period that has seen two CEOs depart in little over a year, including founder Ray Kelvin who left the business following alleged inappropriate behaviour. New customer acquisition plans and a brand refresh will form part of the initial strategy.

Operationally, the plan is to create “a digital and data-enabled operating model, a high-performance business culture, and a commercial and agile approach”. To support this goal, Ted Baker has established a transformation programme team which will be tasked with upgrading and enhancing IT systems.

Such an approach is expected to focus on critical systems such as an upgraded eCommerce platform and a new payment service provider gateway to enable more payment options for customers. The work will also involve enhancing internal systems to improve efficiency, and what the brand describes as “enhanced store and omnichannel service for enhanced insights”.

The new strategy aims to leave no stone unturned, and all work will be conducted while trying to reduce operating expenditure. 

A recent cost review at the company concluded the business is carrying high costs in several areas, including logistics and distribution, the head office and stores. As a result, the intention is to renegotiate carrier arrangements, reduce requirements for air freight and implement productivity improvements in its Derby and Atlanta distribution centres.

Over £65 million has already been invested across IT, CRM, logistics, and infrastructure in the last five years. Meanwhile, the company recently clawed some cash back by selling off its headquarters.

Today’s results announcement revealed Ted Baker revenue was down by 1.4% to £630.5 million in the 52 weeks to 25 January 2020 – a decline attributed in part to significant discounting across the apparel industry, particularly in the UK, as well as shifts in customer behaviour. 

Retail revenue fell by 4.6% to £439.9 million, with store sales down by 5.3% to £321.2 million and eCommerce dropping by 2.5% to £118.7 million. Wholesale revenue was up by 9.6% to £171.5 million, although the channel actually declined by 3.7% on a like-for-like basis when excluding its new footwear ranges.