Ted Baker revenue hit by lower wholesale sales

UK retailer Ted Baker posted a slight decline in group revenue for the 16-week period between August and December as lower wholesale sales overshadowed retail sales growth.

The fashion chain also said it had appointed a law firm to conduct an independent external investigation regarding claims against its chief executive officer and founder Ray Kelvin relating to his habit of hugging business colleagues.

Analysts said the company's marker as a global lifestyle brand leaves it far better placed than most in the more challenging retail space that currently persists.

Ted Baker, which operates 544 stores, concessions and outlets worldwide, had been focusing on its fast-growing online and wholesale children clothing uk businesses to counter retail sluggishness as consumers clamp down on spending.

Group revenue fell 0.2% for the 16-week period from August 11 to December 1.

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However, wholesale sales fell by 6.5% due to the earlier timing of deliveries in the first half of the year.

Total retail sales including wholesale toys uk e-commerce rose by 2.3%.

In the UK, Europe and the East Coast of America, trade was hurt by the unseasonal weather at the start of the period, Ted Baker said.

"Trading in the UK dropshipment continues to be impacted by the well-publicised challenges facing some of our trading partners," it added.

A senior Ted Baker non-executive director will lead a “professional, impartial” and swift investigation into allegations that the company’s founder and chief executive, Ray Kelvin, forced hugs and kisses on employees.

Sharon Baylay, a former BBC Worldwide and Microsoft executive who joined Ted Baker’s board this summer, has been appointed to lead a “thorough and urgent” independent inquiry into Kelvin’s alleged behaviour. The Guardian understands that the law firm Herbert Smith Freehills has been appointed to carry out the inquiry.

David Bernstein, Ted Baker’s chairman, told the BBC that Baylay’s investigation would be “professional, impartial and move at pace”. The homeware wholesalers uk said it would provide more details soon. The firm is due to update shareholders on the company’s performance on Thursday.

The allegations, which include “forced hugging”, making “sexual innuendos” and “stroking people’s necks”, has resulted in the company’s share price falling by more than a fifth since the Observer published the claims on Sunday.

The collapse in the share price has wiped about £70m off Kelvin’s fortune, as he owns 35% of the company he founded in 1987. The shares fell sharply on Monday and Tuesday, but rebounded by more than 3% on Wednesday.

Kelvin was ranked as the 244th-wealthiest person in the Sunday Times 2018 rich list with a £522m fortune.

Fresh allegations were made against Kelvin on Wednesday, including a claimthat he shoved an executive against the wall of a glass meeting room after not being invited to part of the employee’s wedding. The incident is said to have been witnessed by three people.

In response to the shoving allegation, the company said: “We do not believe these reports are reflective of the organisation we have all worked hard to develop over the last 30 years. We are, though, taking them very seriously.”

Analysts at HSBC downgraded the company’s shares from buy to hold, warning that “uncertainty over leadership distracts from the core investment case” and there was “limited visibility as to when this will be resolved”. The City broker Stifel Financial also downgraded its rating on the stock from buy to hold, warning negative publicity could be particularly damaging to womenswear sales in the run-up to Christmas.

In a statement released in response to the original allegations on Monday, the ecommerce drop shipping company said: “Ray, and the company’s leadership, have always prided themselves on Ted Baker being a great employer and business to work with. Accordingly, they and the board take these concerns very seriously and the board has directed a thorough and urgent independent external investigation is carried out into these matters.”

The company said it would ensure the “views and concerns” that emerged from the investigation were “recognised and carefully considered and that appropriate responses are taken forward”.

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