Is this the end for Ted Baker?

Ted Baker founder Ray Kelvin (pictured), who had to step aside from the company last year over allegations of inappropriate behaviour, has seen his holding in the fashion company fall by more than half as part of an emergency £105m fundraising, say Jasper Jolly and Sarah Butler in The Guardian.

Most of the money will come from a share placing. This comes “hot on the heels” of the sale and leaseback of Ted Baker’s London headquarters, which raised £72m to pay back lenders in March.

Kelvin is paying a “heavy price” to keep his business afloat, but something needs to be done, says Ben Marlow in The Daily Telegraph. Since Kelvin left there have been “four profit warnings”; a board “clearout”; an audit error that led to a “massive overstatement” in the value of the clothes sitting in warehouses and “then finally Covid-19”. All these have wiped 90% off the stock in a year.

Try 6 free issues of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

Sign up for MoneyWeek’s free twice-daily newsletter.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Sign up

Still, throwing money at the problem “is no guarantee it will go away”, especially since around half the £200m raised this year will go to creditors and bankers. Investors should avoid the temptation to invest in this “dog of a stock”, says Jim Armitage in the Evening Standard. Not only do lockdowns and homeworking mean that it’s the “worst ever time” for Ted Baker to be selling pricey suits and party frocks, but demand for Ted’s “fancy fashions” is also unlikely to bounce back soon enough for the business and brand to retain “long-term relevance and credibility”. The upshot? While turning around a “soiled brand” is always difficult, it looks “nigh on impossible” in this market.