* Shares lose over a third of their value
* Company posts first-half pretax loss
* Blames weather, steep discounts, weak demand
* Warns on full-year profit for second time
(Recasts, adds executive, analyst comment; updates shares)
By Tanishaa Nadkar and Pushkala Aripaka
Oct 3 (Reuters) - Shares in Ted Baker shed more than
a third of their value on Thursday, after the British fashion
retailer's second profit warning in four months on the back of
what new boss Lindsay Page called the worst business conditions
in decades.
The warning underlines the challenges facing Page, who
became chief executive officer in April, after misconduct
allegations against Ted Baker founder and top shareholder Ray
Kelvin. The company also tapped a new finance chief last week.
Ted Baker and other high-street retailers face several
challenges: weak consumer demand brought on by political
uncertainty related to Britain's departure from the European
Union, heavy discounting and the shift to online shopping.
Other brands have also complained about a tough climate,
although the world's second-biggest fashion retailer H&M
reported its first quarterly rise in pretax profit in
over two years on Thursday.
"We have faced probably the most difficult trading
conditions that I can ever recall in 30 years," Page told
Reuters.
Ted Baker, known for suits, shirts and dresses with quirky
details, posted a first-half pretax loss partly due to
unseasonably warm weather in September.
But wider issues plaguing the sector led it to caution that
second-half results could be lower, setting its shares on course
for their biggest one-day drop. The stock has more than halved
in value since Kelvin stepped down.
"Ted Baker has been thrown onto the market’s discount pile
after a shocker of a first half results statement," said AJ
Bell's investment director Russ Mould.
The profit warning comes days after fast-fashion retailer
Forever 21 filed for bankruptcy in the United States, where Ted
Baker has more than 30 shops and sells at Bloomingdale's stores.
In March, Ted Baker reported its first drop in full-year
profit since 2008 and in June flagged an "extremely difficult"
start to the year as it was recovering from Kelvin's departure.
Kelvin, 62, who had been CEO since the company's launch in
1988, resigned in March over claims he presided over a culture
of "forced hugging". He denied allegations of misconduct.
Ted Baker in June said it expected annual underlying pretax
profit to be between 50 million pounds ($61 million) and 60
million pounds. Analysts at Liberum cut their full-year 2020
pretax profit forecast by about 39% on Thursday.
The company reported a pretax loss of 23 million pounds,
compared to a profit of 24.5 million pounds a year ago, for the
six months ended Aug. 10.
The retailer, which has about 500 stores and concessions
globally, said its retail operating costs excluding one-time
items rose 2.8% to 119.7 million pounds in the reported period.
"Today's first half update from Ted Baker is a massive
disappointment to those who felt that the company’s problems
were behind it," said CMC Markets analyst Michael Hewson.
($1 = 0.8137 pounds)
(Reporting by Tanishaa Nadkar and Pushkala Aripaka in
Bengaluru;
Editing by Bernard Orr and Edmund Blair)
