Wednesday 27 February 2019 8:20 am

Under-fire Ted Baker issues profit warning as shares plunge

Ted Baker warned investors of a £10m hit to profits for its full year this morning, blaming a series of unexpected blows to its bottom line.

Profit before tax for the year to the end of January is now expected to fall in the region of £63m, sending shares crashing 13 per cent to 1,734p.

Read more: Ted Baker posts Christmas sales rise despite chairman scandal

But it could dip even further as the high street retailer faces pressure on several fronts.

Today Ted Baker warned that currency movements will wipe £2.5m off profits, while another £2.5m blow will come from technology systems upgrades.

A “more prudent” view on the value of old stock, as well as warehouse transitions in Asia and the US, will compound Ted Baker’s problems with a £5m financial hit.

But Ted Baker faces other issues too, which it said it has not factored into the £63m figure yet.

An ongoing probe by Herbert Smith Freehills into the behaviour of chief executive Ray Kelvin, who is accused of inappropriate behaviour such as forced staff hugging, will weigh on profits, Ted Baker reaffirmed today. 

So will a previously reported £600,000 dent from debts owed by House of Fraser shortly before its collapse last August.

Read more: Ted Baker appoints law firm Herbert Smith Freehills to probe hugging claims

The retailer has also agreed to pay up to £21m for footwear firm No Ordinary Shoes’ UK and US operations.

Ted Baker is set to announce its full year results on 21 March.