In a bid to cut costs, Ted Baker is axing at least 500 jobs by year’s end, according to a report from the Sunday Times.
According to the report, the British fashion retailer expects to save 6 million pounds (roughly $7.5 million at current exchange) by trimming down on its U.K. workforce. The company, which employs roughly 2,000 people in Britain, reportedly expects to cut approximately 200 jobs from its London headquarters, with the additional layoffs to come at its shops and store concessions.
“Ted Baker confirms that as part of our continuing transformation plan, we have been assessing the appropriate level of staffing across our business and are in consultation with affected colleagues,” a Ted Baker representative said in a statement to FN. “We have not taken this decision lightly and would like to thank all our colleagues for their hard work and commitment. However, we believe this is necessary in order to transform Ted Baker and create a more sustainable business in the future.”
Already struggling amid changing consumer preferences, digital disruption and C-suite shakeups, Ted Baker has faced further challenges stemming from the coronavirus pandemic. For the fiscal year ended Jan. 25, the company posted a 92.4% year-over-year fall in underlying pre-tax profits to 4.8 million pounds, or $5.96 million. From late January through the start of May, the company saw revenues fall 26%, with total retail sales — including e-commerce — down 34% as a result of widespread store closures.
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To help bolster its balance sheet, Ted Baker last month revealed that it had shored up 105 million pounds (approximately $130.47 million) in new equity. The retailer has also announced plans to invest more of its resources in digital as part of a three-year transformation plan under new CEO Rachel Osborne. It said in June that online sales had surged 78% year-over-year since March 22, the day before the U.K. implemented lockdowns.
In the U.K. this year, lost sales due to the impact of the virus and quarantine measures are expected to total approximately 17.28 billion pounds, according to the Centre for Retail Research. The Centre further predicts that 20,622 stores will close across the region (compared with 16,073 in 2019) and that 235,704 people will lose their jobs, up from 143,128 last year.
As British retail continues to deal with the fallout from the coronavirus, Ted Baker is not the only retailer to announce job cuts in recent weeks. This month, Harrods confirmed plans to lay off about 14% of its 4,800 workers, putting 700 jobs on the line, while fellow department store chain John Lewis revealed it would shutter eight stores, leaving approximately 1,300 workers at risk of becoming redundant. Topshop parent Arcadia has also announced plans to reduce its corporate workforce of 2,500 by about 500. Meanwhile, several boldface British retailers, such as Oasis and Warehouse and Debenhams, have fallen into administration amid the pandemic.