By Noor Zainab Hussain
(Reuters) – Fashion retailer Ted Baker <TED.L> reported higher sales in the holiday period, boosted by a surge in online demand and said it was “business as usual” at the brand as an investigation into reports related to the conduct of its founder continue.
Ted Baker’s shares, which fell more than 40 percent in 2018, rose more than 10 percent to 1,779 pence on Wednesday, taking them to the top of London’s midcap index <.FTMC>.
The company, which has more than 500 stores and concessions globally, said retail sales for the five weeks to Jan. 5 rose 12.2 percent. E-commerce sales jumped 18.7 percent to make up more than a quarter of retail sales.
Suits, shirts and dresses with quirky details help the company stand out from rivals. Ted Baker opened its first store in Glasgow in 1988.
The company had a rough 2018, with lower wholesale sales and broader retail sluggishness hampering it as consumers clamped down on spending. It was also hit by a long and harsh winter in Europe and North America, followed by an unusually hot summer.
Retailers are facing a perfect storm of rising costs and uncertainty around Brexit. The trading environment was brutal in the run-up to Christmas with many retailers forced to cut prices.
In December, Chief Executive Officer and founder Ray Kelvin decided to take a voluntary leave of absence while allegations about his conduct, related in part to his habit of hugging business colleagues, were investigated.
The move followed an online campaign claiming to represent over 200 employees, which called on the company to end “forced hugging” and “a culture that leaves harassment unchallenged.”
Kelvin, 62, who owns about 35 percent of the company according to Refinitiv Eikon data, has been CEO since its launch.
“What I can say is, it is very much business as usual here. We are very focused on continuing to deliver on our long term strategic goals,” Acting CEO Lindsay Page said, declining to comment on the investigation.
He added that investors had been very supportive, but declined to comment on employee sentiment.
Page said the company had “many” contingency plans for Brexit, but did not provide details.
He added that Ted Baker did not need to stockpile in the run up to March as inventory for its spring and summer lines flow in between December and February, with winter material coming in after June.
“If March proves to be a significant date, that is something we can manage. Fifty percent of our business is not in the UK, so we will be unaffected,” Page said.
(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Bernard Orr)