Ted Baker shares plunge after profit warning due to exchange rates

Ted Baker has issued a profit warning and said earnings are forecast to be more than £10m lower than previously expected, blaming foreign exchange movements.

Pre-tax profit for the year to 26 January is expected to come in around £63m, as opposed to previous projections of £73.8m.

The group said foreign exchange fluctuations accounts for around £2.5m of the change, mainly linked to weaker sterling.

Meanwhile, the company said higher spending on new systems had affected the balance sheet.

The new profit forecast does not include any costs linked to the investigation into alleged misconduct by Ted Baker founder, Ray Kelvin.

Mr Kelvin has been accused of inappropriate behaviour towards his staff, with workers claiming that the retail boss made “sexual innuendos” towards employees, and encouraged a culture of “forced hugging”.

The group announced that Mr Kelvin would take a voluntary leave of absence in December last year, as lawyers began a probe into the allegations of harassment.

However, the scandal did not hurt sales at the company, with retail sales growing by 12 per cent over Christmas.

Shares in Ted Baker fell by as much as 17 per cent in early trading.

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