After fundraising, Ted Baker founder is no longer biggest shareholder
Ray Kelvin’s involvement with British clothing brand Ted Baker keeps decreasing, with the company’s founder no longer being its biggest shareholder.
The entrepreneur has seen his stake slashed by 55% following a £105 million fundraising to support the brand through the coronavirus pandemic and fund a new growth strategy.
On Monday, the company announced it was raising £95 million through a share placing and a further £10 million through an offer for subscription.
According to The Guardian, Kelvin bought just £3.5 million of new shares, diluting his stake in the business down from 35% to 15.8%.
Investment firm Toscafund is understood to have used the share listing to nearly double its stake to 26.4%, becoming the biggest shareholder.
Ray Kelvin suffered a very public fall from grace last year after a number of former Ted Baker employees came forward accusing him of inappropriate behaviour. Following a voluntary leave of absence in December 2018, he resigned as CEO of the brand in March last year. Kelvin continues to deny all allegations of misconduct.
The fundraising comes after a tough period for the clothing retailer. In an earnings report released Monday, Ted Baker reported a pre-tax loss of £79.9 million for the year to 25 January and a 1.4% fall in revenues.
That was before the Covid-19 pandemic forced clothing stores across the UK, Europe and North America to close their doors. In the 14-week period from 26 January to 2 May, revenues dropped 36% year-on-year, including a 34% decline in retail sales (including online).
Ted Baker said the fundraising initiative will support its new “Formula for Growth”, a strategy led by new CEO Rachel Osborne to return the company to profitable growth. It includes reenergising product and brand, prioritising digital and capital light growth and a significant cost reduction.
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