Investors in Ted Baker will be hoping for some rare positive news to cheer about in its trading update next week after a dire year for the luxury fashion brand.
Shares in the UK fashion firm have slid by more than 75% since January in a year which has seen it post three profit warnings.
Michael Hewson, chief market analyst at CMC Markets UK, said on Monday that the company has “lurched from one crisis to another” over the past two years.
The firm came under significant pressure after founder and chief executive Ray Kelvin resigned from the company in March following allegations of inappropriate behaviour towards staff.
Mr Kelvin had taken already taken a step back from activities at the business in December 2018 after allegations of misconduct involving “forced hugs” and ear-kissing. Mr Kelvin has denied any wrongdoing.
Earlier this week, the company’s shares plunged further after bosses uncovered that its inventory had been overstated by between £20 million and £25 million.
Ted Baker said it has brought in lawyers and independent accounts to assess the issue but insisted it will have no cash impact and only relates to previous years.
But it is the company’s trading performance which will be the focus of scrutiny on Wednesday December 11, when the firm updates investors on trading for the 17 weeks to December 7.
In its half-year update in October, the company swung to a £23 million loss for the six months to August 11 as it was impacted by heavy discounting across the high street.
It also reported a 0.7% decline in sales to £303.8 million in the period as it was also impacted by consumer uncertainty and a poorly received spring/summer collection.
During the update, the fashion brand said its troubles could continue into the second half of the year if market conditions do not improve.
Investors in the company will also be hoping that it reported strong Black Friday sales after offering a blanket 30% off discount across its merchandise for the event.
Trade Ted Baker PLC - TED CFD
The company has also attempted to drive a turnaround in performance by appointing consultancy AlixPartners for a root-and-branch review of its operations, the Financial Times reported on Thursday.
In response, a spokesman for Ted Baker said: “From time to time the group engages professional advisers to provide additional expertise in order to help enhance the group’s operations and drive progress against Ted Baker’s strategy to further develop as a global lifestyle brand.”
In its most recent broker note, analysts at Cantor Fitzgerald said they believe “near term headwinds are set to continue and it will take time for investor confidence to return” at the fashion house.