British fashion retailer Ted Baker cut 953 jobs as coronavirus lockdowns sent first-half losses soaring, it said on Monday, warning of the potential for further pain from a no-deal Brexit as the European Union divorce deadline looms.
Retail stores have been hit hard by coronavirus restrictions and closures, with job losses running in the thousands, while the looming end to Britain’s Brexit transition period threatens to disrupt the flow of goods through UK ports unless a new trade deal can be agreed before the end of the month.
Philip Green’s Arcadia retail group last month became the biggest corporate casualty of the pandemic so far and Debenhams is set to shut up shop after 242 years.
“Even with some of our legacy issues being amplified by COVID-19, our balance sheet is materially stronger than we had envisaged this early in the plan and operational cash flow will be positive for the full-year,” said Ted Baker Chief Executive Rachel Osborne.
The coronavirus crisis compounded difficulties for the company, which has been hit by profit warnings, management changes and an accounting scandal since founder Ray Kelvin stepped down as CEO in 2019 after misconduct allegations, which he denies.
Ted Baker has overhauled its management team this year and raised about 95 million pounds ($126 million) in equity to bolster its pandemic-hit finances.
Its three-year turnaround plan is expected to deliver 31 million pounds in annual savings, up from the previously targeted 27 million pounds, the company said on Monday.
With Britain’s full exit from the European Union only weeks away and a trade deal still hanging in the balance, Ted Baker warned that, in a worst-case scenario, full-year profit could take a 16.1 million pound hit.
Ted Baker, known for suits, shirts and dresses with quirky details, said its pretax loss widened to 39 million pounds in the six months to Aug. 8, against 2.7 million pounds a year earlier.
By Yadarisa Shabong; Editors: Ramakrishnan M. and David Goodman.