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26 February 2020
Ted Baker Plc
('Ted Baker' or the 'Group')
STRATEGIC UPDATE
On 10 December 2019, the Board of Ted Baker plc, the global lifestyle brand, announced several actions focused on addressing underperformance and improving efficiencies across the wider Group.
Since that announcement, the Group's Management team has conducted a wide-ranging review of Ted Baker's operational efficiency, costs and business model.
In conducting this operational review of the business, the Management team has identified a number of key strategic priorities. These include:
1) customer focus: increasing sales through broadening and deepening Ted Baker's customer relationships;
2) brand revitalisation: re-energising the Ted Baker brand and creativity of the Group;
3) product line extension: improving product relevance and broader product lines;
4) eCommerce growth: enhancing Ted Baker's ecommerce proposition;
5) channel optimisation: territorial expansion driven by channel economics; and
6) cost efficiency: end-to-end operating margin improvement and the efficient use of capital.
These strategic priorities will form the basis of a broad Transformation programme at Ted Baker, the first phase of which is focussed on profitability, cost and the effective use of capital.
Further details of the Group's strategic priorities and Transformation programme will be detailed in full at Ted Baker's Full Year Results which are expected to be announced in May.
Through focusing on these priorities and the Transformation programme, Management and the Board are confident they can create a more commercial, agile, fast-paced, effective and simple organisation.
Cost Review
The Management Team's operational review has run alongside the cost review that the Performance Improvement division of Alix Partners has been working on. That cost review has now concluded and identified a number of ways in which the Group can move to a more sustainable cost base that reflects the scale of the business today while allowing for continued investment in the brand and customer offer.
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. 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.
Combined, this is expected to result in a reduction of 102 roles and the removal of a further 58 posts which are currently vacant.
The expected financial impact from this initiative will be to reduce costs by £5m in the current financial year, and by £7m on an annualised basis. These savings will incur a cash restructuring charge of £2.7m, which will be taken in the current year.
The reduction in our office headcount is the first of a range of expected initiatives to improve the efficiency and cost structure of the Group. Management will update on further initiatives in due course.
Acting Chief Executive Officer, Rachel Osborne, said:
'2019 was a very challenging year for Ted Baker, but I am confident about the future growth prospects for the Group. 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.'
This announcement contains inside information. The person responsible for arranging the release of this announcement on behalf of the Group is Peter Hearsey-Zoubie, Company Secretary.
Ted Baker | Tel: +44 (0) 20 7255 4800 |
Rachel Osborne, Acting Chief Executive Officer | |
David Wolffe, Acting Chief Financial Officer | |
Tulchan Communications | Tel: +44 (0) 20 7353 4200 |
Jonathan Sibun / Michelle Clarke |
Enquiries and further information:
www.tedbaker.com
www.tedbakerplc.com
Media images available for download at:
www.tedbakerplc.com/ted/en/mediacentre/imagelibrary
Cautionary statement regarding forward-looking statements
This announcement contains certain forward-looking statements. These forward-looking statements include matters that are not historical facts or are statements regarding the Group's intentions, beliefs or current expectations concerning, among other things, the Group's results of operations, financial condition, liquidity, prospects, growth, strategies, and the industries in which the Group operates.
Forward-looking statements are based on the information available to the Directors at the time of preparation of this announcement, and will not be updated. The Directors can give no assurance that these expectations will prove to have been correct. Due to inherent uncertainties, including both economic and business risk factors underlying such forward looking information, actual results may differ materially from those expressed or implied by these forward-looking statements.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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Strategic Update - RNS
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Ted Baker plc published this content on 26 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 February 2020 10:03:00 UTC
