(Reuters) - Ted Baker (TED.L) plans to raise about 95 million pounds ($118 million) by selling new shares at a steep discount to help it ride out the coronavirus crisis, the fashion brand said on Monday, as it slumped to an annual loss.
In an update after market-close, the company said it planned to offer 126.7 million shares at 75 pence each, a 51.1% discount to its closing price on May 29, having announced the proposed placement earlier in the day.
Shares in the company, known for suits, shirts and dresses with quirky details, closed about 4% higher at 130 pence on Monday after initially falling 24%. The stock has lost nearly 70% so far this year.
It is the latest British company to seek cash from shareholders as the coronavirus pandemic plunges the economy into recession, following the likes of office provider IWG (IWG.L), events guide specialist Time Out (TMOT.L) and caterer Compass (CPG.L).
Even before the crisis, Ted Baker was struggling to recover from setbacks including an accounting scandal, profit warnings and management change after founder Ray Kelvin stepped down amid misconduct allegations, which he denies.
New Chief Executive Rachel Osborne, a former manager at department stores group Debenhams, laid out a transformation plan on Monday including cost savings and a shift towards online sales. Analysts say Ted Baker has struggled to hold on to customers amid online competition from the likes of Boohoo.com.
The company plans to gradually reopen stores - closed since a lockdown to contain the virus pandemic in late March - from the middle of this month, in line with government guidance.
For the year ended Jan. 25, Ted Baker made a pretax loss of 79.9 million pounds, compared with a profit of 30.7 million in the prior year. Total revenue fell 1.4% to 630.5 million pounds.
Revenues also slumped 36% for the 14 weeks from Jan. 26 to May 2.
“The Board recognises that last year’s performance was disappointing for all of Ted Baker’s stakeholders, reflecting a challenging external environment as well as significant internal disruption, driven by a number of senior leadership departures,” the company said.
($1 = 0.8022 pounds)
Reporting by Muvija M in Bengaluru; Additional reporting by Pushkala Aripaka; Editing by Rashmi Aich and Mark Potter