Ted Baker founder Ray Kelvin has slashed his stake in the premium fashion and lifestyle brand following a share placing to raise £95m in cash to fund its transformation plans and help it to ride out the COVID-19 crisis.
Kelvin’s stake was reduced to 15.8%, from 35%, after he bought £3.5m of new shares in the placing in which investment firm Toscafund nearly doubled its stake to 26.4% making it Ted Baker’s biggest shareholder.
Toscafund’s founder Martin Hughes, is reportedly nicknamed “the Rottweiler”, for his tenacity at forcing change at the companies in which he owns a stake.
Ted Baker’s share price has lost 95% of its value in the past two years and today its shares are trading at 128p; in June 2018 they traded at 1,998p.
The drop reflects a tumultuous time at the brand which was once fashion’s darling of the Stock Market.
Kelvin was obliged to stand down as CEO early last year after facing allegations of staff harassment, which he denied. He was replaced by his long-standing COO Lindsay Page, but by December Page too had gone, along with chairman David Bernstein following a series of profits warnings and an overstatement of stock value to the tune of more than £50m.
Former Debenhams CFO Rachel Osborne joined Ted Baker last autumn as CFO but was subsequently appointed as CEO. A new chairman, former Next chair John Barton, has been appointed and it recently announced that Topshop’s Anthony Cuthbertson would be joining the business as global creative director.
Yesterday it was revealed that the company had swung to a to a £79.9m loss before tax in the 12 months to 26 January compared to a profit of £30.7m last year as it was hit by £84.6m of non-underlying expenses, mainly comprising total charges of £45.8m related to inventory, £16.2m related to impairment of store assets, £7.6m related to losses on the disposal of its Asian business and £6.5m for legal and professional costs. Total revenues were down 1.4% to £630.5m.
Osborne announced the share placing as well as “Ted’s Growth Formula” a transformation plan designed to get the business back on track. The plan covers three areas: “Stabilising the company’s foundations”; “Growth drivers”; and “Operational” excellence. Ted Baker said that its plans should lead to a more profitable business running on a lower cost base.
Earlier this year Osborne carried out a sale and leaseback of its London headquarters, The Ugly Brown Building, raising £79m.
Yesterday’s share placing focused on institution shareholders and excluded individuals, the company plans to raise a further £10m today via an offer open to new and existing investors.