Fashion group Ted Baker today raised a £ 95 million rescue fund to see it through a crisis that occurred because it admitted losing nearly £ 80 million last year.
The scandal-hit company after its founder had to stop following violations with staff, said it was raising money by selling new shares in the company to help it “navigate” the coronavirus crisis and invest in a restructuring plan for the company. But encouraging people to invest, the stock will be issued at a massive discounted price of 75p compared to 153.3p on Friday.
It announced the provisional step of reporting that in the year to January 25 – long before covid began to affect UK sales – revenue fell 1.4% to £ 630.5 million while pretax profit of £ 30.7 million in the previous year turned into a loss of £ 79.9 million in 2020.
Reflecting the impact of covid, revenue in the 14 weeks to 2 May fell 36% compared to the same week of the previous year.
“The board acknowledged that last year’s performance was disappointing for all of Ted Baker’s stakeholders, which reflected a challenging external environment and significant internal disturbances, driven by a number of senior leadership departures,” the company said.
Founder Ray Kelvin quit after accusing him of hugging his colleagues against their will. Chief executive Lindsay Page and chairman David Bernstein both later resigned as well.
The company said the newly collected funds would enable it to invest behind “inherent strengths”, which it said were strong brands and diverse distribution through its own shops, wholesalers and licenses, as well as wide product ranges and broad geographical spread.
After undergoing a business review with consultant Alix Partners in a move previously said to cut costs at headquarters in the UK and US, it will now focus on increasing online operations, cutting expenses and managing cash flow more efficiently. It will also cut rental bills and payroll payments in stores.
These steps are expected to cause job losses and a large reduction in the number of suppliers used from 150 to 100.
New chief executive Rachel Osborne said: “I am confident that our transformation plan will enable us, Ted Baker, to take advantage of our opportunities and provide value to all our shareholders.”
He was advised at a fundraiser by Goldman Sachs and Liberum who acted as joint book borrowers, joint underwriters and joint global coordinators. Liberum sponsors this problem.
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