Ted Baker is to axe 160 roles as the fashion retailer grapples with declining sales, profits and a £58m accounting error.
It announced the cuts – 102 staff redundancies and a decision not to replace 58 vacant roles – in the first stage of a restructuring designed to put the business back on track.
The cuts, which will affect office staff and not store employees, are expected to save £5m in the current financial year and £7m annually.
Ted Baker’s market value has tumbled by more than 80%, from £830m to £140m, in the past year. The company now aims to “simplify and delayer” its structure.
Rachel Osborne, the acting chief executive, said: “2019 was a very challenging year. The strategic priorities we are announcing today will re-energise the Ted Baker brand and improve our customer proposition, ensuring the long-term success of the business.”
The company, which employs 3,700 staff globally, said further cost and efficiency plans would be announced. Ted Baker has 560 stores and concessions worldwide: 201 in the UK, 122 in Europe, 130 in North America, 98 in the Middle East, Africa and Asia, and nine in Australasia.
Broad strategic priorities were also announced, including bolstering digital sales and expanding into new territories. “We need to become more efficient, simplify our structure and reduce our cost base to more sustainable levels for the future,” Osborne said.
The retailer issued four profit warnings in 2019 and slumped to a first-half loss of £23m in October, its first in more than two decades. Last month, it revealed that an accounting error was twice as big as initially thought, after a review by the accounting and consultancy Deloitte.
Ted Baker’s bankers appointed the advisory firm FTI Consulting to carry out a business review last month, amid concerns the company’s weak financial position could force it to seek a cash injection. There is also an investigation by the London law firm Freshfields into the reasons for the balance sheet misstatement.
The most recent profit warning, in December, prompted the departure of chief executive Lindsay Page and executive chairman David Bernstein. Osborne, who was finance director at Debenhams, joined Ted Baker in September, and Sharon Baylay became acting chair of the board.
In March, Ray Kelvin, the founder and former chief executive, resigned after allegations of “forced hugs” at the company. He has denied allegations of misconduct.
Before Christmas Ted Baker reduced its expectations for profit before tax for the year ending 25 January 2020 to £5m, compared with £50m the previous year.