Up to 160 jobs at risk as Ted Baker announces shake-up
- Ted Baker puts around 160 roles at risk after announcing new plans to cut costs
- Acting CEO Rachel Osborne has called for series of reviews to deliver transformation programme
By guest author Sahar Nazir from Retail Gazette
Ted Baker has reportedly revealed that between 100 to 160 jobs are at risk of redundancy as it shakes up the company after a “challenging year”.
Following a review, the embattled fashion retailer said it plans to cut costs on its office functions, which will see staff lose their jobs.
According to various reports, there is likely to be at least 102 head office redundancies, with a further 58 job posts – currently vacant – set to be scrapped.
”A key area of focus for management following the cost review is to reduce our office cost base, in particular by simplifying and de-layering the group’s organisational structure,” Ted Baker said.
“Earlier this month, the executive committee was restructured, with the number of members reduced from 13 to 9.
“The group has today announced proposals to reorganise key head office and business functions to align with the new simplified management structure.”
Ted Baker expects to reduce costs by GBP 5 million in the current financial year, and by GBP 7 million on an annualised basis.
The savings will incur a cash restructuring charge of GBP 2.7 million, which will be taken in the current year.
“2019 was a very challenging year for Ted Baker, but I am confident about the future growth prospects for the group,” Ted Baker acting chief executive Rachel Osborne said.
”The strategic priorities we are announcing today will re-energise the Ted Baker brand and improve our customer proposition, ensuring the long-term success of the business.
“We recognise that to support these priorities we need to become more efficient, simplify our structure and reduce our cost base to more sustainable levels for the future.
“The changes we are announcing today are difficult because colleagues across the business have been working hard in what has been a challenging period for Ted Baker.
“I would like to thank all of them for their commitment and the passion they have shown for the business.
”The board and I believe that we will only realise Ted’s long-term potential by transforming the way the business operates and the actions we are announcing today are important steps in that transformation.”
Osborne called for a further series of reviews aimed at delivering a transformation programme in time for Ted Baker’s full-year results in May.
Ted Baker has issued a series of profit warnings in the past year as it suffers from tough trading on the high street.
On Tuesday, February 25, 2020, the retailer was reportedly in talks to offload its London headquarters to British Airways’ pension scheme in a bid to raise cash after being rocked with an accounting crisis.
According to Sky News, the retailer is close to striking a deal with BA’s pension scheme to sell a big stake in its Ugly Brown Building in North London.
Shares in the retailer declined since it emerged in January that Ted Baker had overstated its stock by GBP 58 million – much higher than the initial estimate of GBP 25 million as first revealed just weeks before Christmas.
If the sale of its head office is successful, Ted Baker can expect to raise tens of millions of pounds to help shore up its balance sheet.
The GBP 58 million black hole follows a tough year for the retailer, which included a sexual harassment scandal involving founder Ray Kelvin and the resignation of chief executive Lindsay Page and chairman David Bernstein.
Page had only been chief executive for nine months, after taking over from Kelvin, who quit earlier in the year amid the harassment scandal following allegations from staff.