Ted Baker is cutting nearly a thousand jobs as the coronavirus pandemic caused to wider losses at the company and slashed its revenues by nearly half.
The British fashion retailer announced plans to make 953 reductions across its corporate offices and retail stores. The announcement came in a statement accompanying the firm’s half-year financial results, which showed a 45.9% decline in revenues to 169.5 million pounds (or $225.3 million at current exchange). During the 28 weeks ended Aug. 8, adjusted losses amounted to 28.6 pence (or 38 cents) per share, compared with the prior year’s loss of 4.5 pence per share.
“This was an extremely hard but necessary decision, and wherever possible we have tried to protect customer-facing roles,” CEO Rachel Osborne said. “I want to thank all my colleagues during this difficult period for their hard work and efforts that have helped to maintain such a strong brand.”
In the spring, more than 2,600 workers across the company’s corporate offices, warehouses and stores were furloughed amid widespread restrictions on nonessential businesses. A report from British news media in mid-July suggested that Ted Baker planned to axe at least 500 roles — including some jobs at its London headquarters — by the end of 2020 in a bid to cut costs. It added that the business expects to save 6 million pounds (or nearly $8 million) by trimming down its workforce.
This year, Ted Baker has also made changes to its management team and raised about 95 million pounds (or $126.46 million) in equity to bolster its finances.
“A slow recovery in consumer demand due to COVID, the latest round of government lockdown measures and the well-publicized heavy discounting online across global markets by many of our peers has led to many of our shops closing for a second time, severely impacted footfall into city centers and a heightened level of promotional activity,” Osborne said today.
However, the executive added Ted Baker’s balance sheet is “far stronger” than expected early into its turnaround plan, which was introduced in June. As part of these efforts, revealed in the half-year report, the company intends to reduce head office costs, both in the United Kingdom and North America, in order to “simplify” the organization. (It added that “working with skeleton-team structures” during the peak of COVID-19 lockdowns “gave us the confidence to be more ambitious on cost savings.”)
With the reductions, the company is now projected to see 31 million pounds (or $41.27 million) in annual savings — up from the previously targeted 27 million pounds. Osborne added that, despite reporting material operating losses, underlying free cash flow will be “positive” for the year.