The share price of fashion retailer Ted Baker has declined by as much as 35% after it slashed its outlook on profits and its chief executive officer (CEO) resigned.
Ted Baker faced various challenges recently leading to the decline of its share price, including the suspension of dividend, the resignations of its CEO and executive chairman, and the reduction of its profits outlook.
The company's shares are now trading 17% lower in London, with an overall decline of 78% for the year.
In a statement, the high-end retailer said: "The last 12 months has undoubtedly been the most challenging in our history. The board has instigated an immediate action plan to improve the performance of the group," it said."
The company attributed this to difficult business conditions entering the holiday shopping period. Ted Baker is now projecting its profit for 2019 to be between £5 million and £10 million, which represents a 90% decrease from the earnings guidance it issued in June.
According to the retailer, it has hired independent consultants Alix Partners to conduct a "wide-ranging review" of its operational efficiency, costs and business model. It has also suspended its issuance of dividend.
Ted Baker also announced the resignations of CEO Lindsay Page, who has only been holding the position for less than a year, and executive chairman David Bernstein. Page took office as acting CEO in March following founder Ray Kelvin's abrupt departure
Kelvin was forced to resign due to allegations of harassment, including "forced hugging" staff members, which he denied. Kelvin has been on a voluntary leave of absence since December 2018 due to the allegations.
An online petition was signed by thousands of people, including staff members and customers, calling for an end to the hugging practice and a better system for reporting harassment allegations at the company.
Chief financial officer (CFO) Rachel Osborne has been tapped to serve as acting CEO while the company searches for someone to replace Page starting January 2020.
