Investors Sell Ted Baker Stock After Announcing Profit

The shares of Ted Baker lost more than a quarter of their value on Tuesday morning after the firm announced that the profits would be below expectations.

In response to the profit warning, investors sold shares, wiping out more than £ 150 million of the company's value.

The fashion house has attributed the profit "lower than expected" to the "extremely difficult" commercial conditions.

This is the latest setback for the firm following the departure of its founder, Ray Kelvin, in March, following allegations of harbadment.

"Unhealthy weather"

The company has complained of "extreme weather" in North America and a "very promotional" business environment, claiming that profits for the year ending in January 2020 should be between 50 and 60 million pounds sterling.

The estimate is below the expected £ 70.9 million.

"The magnitude of the warning on the profits of Ted Baker today is going to make eyebrow … There will be questions about the departure of founder Ray Kelvin and on the more general issue of how to put Ted back on track, "Peel Hunt's badysts said in a note.

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In March, Ted Baker announced a first drop in annual profits since 2008, as traditional brick and mortar stores struggled to compete with online retailers and British consumers tightened their handbags.

Mr. Kelvin, who had been General Manager since the company's inception in 1988, resigned in March after claiming to have presided over a "hug" culture. He denied any allegation of misconduct.

Lindsay Page, who replaced Kelvin, told Reuters: "The markets we are dealing with have been extremely difficult and this has also led to discount levels, which I think we have rarely seen before, particularly in the United Kingdom. "

"Many of our new products will begin shortly and we are confident in our collections for the coming season," she said in a statement to the stock market.

Analysts in Liberum said that "short-term and identifiable product issues" were quickly resolved, but that "the unpredictable business environment in all markets seemed less fine".