TIDMTED
RNS Number : 1869E
Ted Baker PLC
26 February 2020
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 GBP5m in the current financial year, and by GBP7m
on an annualised basis. These savings will incur a cash
restructuring charge of GBP2.7m, 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.
W e 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
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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