Ted Baker Plunges After Profit Warning Adds to Clothier's Woes
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Ted Baker Plc, the fashion chain rocked by an investigation of its founder’s behavior, plunged after it said profit for the year was hurt by adverse currency movements and other factors.
Pretax profit for the year ended January 26 will now be about 63 million pounds ($84 million), the company said in a statement. Analysts had estimated 74 million pounds, according to data compiled by Bloomberg. The shares fell as much as 17 percent, the most since December 3.
The chain has been struggling since allegations emerged that founder Ray Kelvin gave employees unwanted hugs and asked female staff to sit on his knee, leading to his stepping aside from his role as executive chairman in December. The profit warning stemmed from a new set of problems, including product costs of about 2.5 million pounds and an inventory writedown of about 5 million pounds.
The troubles at Ted Baker have tarnished what had been one of the few bright spots in British retail, as the falling pound has discouraged consumers and online retailers have gained ascendance over street-based stores. An investigation into the reports about Kelvin by law firm Herbert Smith Freehills LLP is ongoing.
The pound’s movements against other currencies, mainly the U.S. dollar and the euro, hit profit by about 2.5 million pounds, Ted Baker said. The company will report full-year results on March 21.
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