Ted Baker crisis: Stock plunge triggers takeover talk

The chances of ousted founder Ray Kelvin attempting to buy Ted Baker increased today as the shares crashed, slashing the value of the retailer.

The struggling fashion brand’s stock plunged on a car-crash update which revealed that both Ted’s chief executive and executive chairman will leave, the dividend has been suspended and profits have been hurt by a poor Black Friday. The battered stock crashed 30% to 16-year lows before recovering, down 15% or 58p at 314.7p.

The fall values the company at £150 million and added fuel to the fire of City rumours that Kelvin — who left in March in the wake of a “forced hugs” scandal — could look to take Ted private on the cheap, potentially with private equity backing. The enigmatic founder is its largest shareholder with a 35% stake. Kelvin, who denies harassment allegations, declined to comment.

His former lieutenant, chief executive Lindsay Page, is to leave after a troubled eight months in the role. He will remain as an adviser after 22 years with the business. Executive chairman David Bernstein, the former chair of the Football Association, left today after six years in post. Both are expected to receive a pay-off, likely to be a year’s salary — Page was on £460,000, with Bernstein earning £200,000.

The board will now be led by Sharon Baylay, previously a non-executive, with finance chief Rachel Osborne acting chief executive. Osborne only joined the business last month and immediately discovered a £25 million misstatement in the previous value of its stock.

A trading update, brought forward from tomorrow, revealed that a squeeze on margins amid Black Friday discounting last month had led to a fourth profit warning in a year. Annual profits are now expected to be between £5 million and £10 million, dependent on Christmas trading. Retail sales fell 5.5% in the 17 weeks to December 7.

A number of consultants are investigating options to restructure the business and analyse the stock error.

Peel Hunt analyst John Stevenson said high prices and a “lack of newness” in its products had turned shoppers away. He added: “There’s management uncertainty, operational uncertainty and they may breach their banking covenants. So there’s a raft of crises. This means Ted Baker is a takeover target.”

House broker Liberum said: “We do believe Ted remains a strong brand… if the right decisions are made it could come out of this a much better business.”