Ted Baker is close to issuing a new share placing in a bid to survive the coronavirus lockdown, which has brought trade at the already struggling business to a halt.
The company said a noticeable impact on sales in the wake of the pandemic coupled with poor trading last year was making the “need for a wider transformation more acute”.
“As a result, the company is in an advanced stage of preparation for a placing an open offer,” it said. The company would, however, not comment on reports that it was seeking to raise up to £80m, roughly its market value, as reported by Sky News.
Ted Baker’s founder Ray Kelvin, who left the company last year after 32 years following allegations of “forced hugging”, is still its largest investor.
Ted Baker has provided little insight into trading since early December, when it issued its fourth profit warning of the year and appointed a consultancy to carry out an operational review after identifying a £25m accounting error.
In January, Ted Baker said it had miscalculated the error and had in fact overstated its stock by £58m but did not give an explanation. It also warned that full-year profits could be as low as £5m for the year — a 90 per cent collapse from a year earlier, not counting the impact of the lockdown.
In the middle of its crises, Ted Baker’s former chief executive and chairman both announced their departures. The fashion retailer has since appointed Rachel Osborne, who formerly oversaw the restructuring at Debenhams, as chief executive. Last month, the company named former Next chair John Barton as its new chairman.
The company has furloughed roughly 2,000 people, or 75 per cent of its staff, but said on Friday that it would recall some staff as it prepared for a gradual reopening of its stores, once restrictions ease on June 15.
In March, the retailer said it had reached an agreement to sell its headquarters in London, known internally as The Ugly Brown Building, to the British Airways pension scheme. It also said it was intending to announce full-year results in May, which have been delayed.