Ted Baker promises reform after ‘forced hugs’ scandal that prompted chief executive’s departure
Annual pre-tax profits slump by more than a quarter
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Your support makes all the difference.Ted Baker has said it is “determined to learn lessons” from a “forced hugs” scandal that prompted the departure of founder Ray Kelvin.
The statement was delivered alongside Ted Baker’s results which revealed that annual profits at the fashion chain had slumped by more than a quarter.
Mr Kelvin was forced to leave this month after allegations that he massaged employees, kissed their ears and asked some to sit on his lap. The firm is continuing an investigation into the allegations against Mr Kelvin.
Pre-tax profits at the company he founded 32 years ago fell 26.1 per cent to £50.9m in the year to 26 January.
Sales grew across the UK, Europe and North America group, sending overall revenue up 4.4 per cent to £617.4m.
The results come at the end of a challenging year for the company, which has taken its toll on the balance sheet.
Exceptional items totalling £12.1m included the cost of an external investigation into Mr Kelvin’s conduct.
Ted Baker also wrote off unpaid bills from House of Fraser after the department store went into administration last August.
The company also cut prices in a bid to attract shoppers in a challenging environment on the high street. Price promotions contributed to a narrowing of gross margins which fell to 58.3 per cent from 61 per cent.
Executive chair David Bernstein said: “Performance has been impacted by the very difficult trading conditions throughout the year, including competitive discounting across the retail sector, consumer uncertainty, the well-publicised challenges facing some of our UK trading partners, and the unseasonable weather across our global markets at different points throughout the period.
“Despite this challenging backdrop, Ted Baker continues to develop as a global lifestyle brand reflecting the strength of the brand, the design and quality of our collections and the passion and commitment of our talented teams across the world.”
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