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Ted Baker, the formal and occasion wear retailer, has reported a slump in annual sales during the coronavirus pandemic but argued it is now better placed to navigate continuing disruption.

The fashion chain reported a deepening pre-tax loss of £107.7m for the year to the end of January on the back of a £77.6m sum in the previous 12 months.

The company was already in the doldrums at that time – before COVID-19 hit – as it pledged a recovery from a string of setbacks including a £58m inventory overstatement and the departure of previous chief executive and founder Ray Kelvin following misconduct allegations – claims he has denied.

Ted Baker denied there was a culture of 'forced hugs' at the firm
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Ted Baker’s founder Ray Kelvin denied claims including ‘forced hugs’ while he ran the firm

Ted Baker said on Monday that the pandemic had taken an inevitable toll on its CEO Rachel Osborne’s transformation plan, which includes a greater focus on online sales.

It revealed an underlying pre-tax loss of £59.2m for its last financial year compared to a £4.8m profit the previous year as its global store footprint fell under coronavirus trading restrictions.

Total revenue fell 44% to £352m though e-commerce sales were up 22% to £144.9m.

The company, like many rivals, had to cut jobs and raise cash during the height of the crisis as it navigated the disruption to normal life which heavily restricted demand for its prime offering.

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Competitors with a focus on athleisure and casualwear have tended to do better given more people working from home and the lack of opportunities to enjoy nights out.

Ms Osborne said: “While the impact of COVID-19 is clear in our results and has amplified some of the legacy issues impacting the business, Ted Baker has responded proactively and is in a much stronger place than it was a year ago.

Ted Baker has 560 stores and concessions worldwide
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Ted Baker – long criticised for a lack of focus on online sales – has 521 stores and concessions worldwide

“During the period, we delivered robust cashflow generation, fixed our balance sheet, refreshed our senior leadership team and today we are upgrading our financial targets for the second time since outlining our new strategy last summer.

“Additionally, we have made good progress with our sustainability strategy, Fashioning a Better Future, including the mapping of all of our factory partners within our supply chain and significantly increasing our usage of cotton from sustainable sources to 69%.”

Shares opened positively initially but later fell back by around 1.6%.

Senior analyst at Freetrade, Dan Lane, said the results represented something of an own goal, despite the increase in e-commerce sales.

“Ted’s online presence needs an almighty boost and should have been focused on years ago.

“It finally started to get some attention as part of ‘Ted’s Formula For Growth’ but leaving it so late has meant being ill-prepared for the shift online over the year.

“It’ll be the epitome of ‘too little too late’ for a lot of beleaguered investors.”

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London-listed SPAC targets merger with chronic disease drug developer Istesso

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London-listed SPAC targets merger with chronic disease drug developer Istesso

The first “blank cheque” company to list in London after an overhaul aimed at helping the City compete with rival financial centres is in talks to merge with a privately owned drugs group developing treatments for chronic diseases.

Sky News has learnt that Hambro Perks Acquisition Company (HPAC) is in advanced negotiations about a deal, which could be announced within weeks.

If successfully completed, the merger would represent a milestone for the London stock market even as scores of so-called special purpose acquisition companies (SPACs) – predominantly in New York – are being wound up following a slump in valuations.

City sources said on Saturday that HPAC had been in discussions with Istesso for some time.

A merger would value the company at several hundred million pounds, although a more precise valuation could not be ascertained this weekend.

Founded in 2017, Istesso focuses on an area of medicine called immunometabolism, and is developing treatments for severe diseases such as arthritis and multiple sclerosis.

Several of its products have reached Phase-II trials, with others at an earlier stage of development.

One biotech analyst who is familiar with Istesso’s work said the business appeared to have significant growth potential.

Istesso is majority-owned by IP Group, the London-listed company which focuses on commercialising intellectual property across sectors such as energy and healthcare.

Last week, IP Group named Anita Kidgell, head of corporate strategy at the FTSE-100 pharmaceuticals giant GSK, as a non-executive director.

The SPAC was the brainchild of Hambro Perks, a London-based venture capital firm which holds stakes in dozens of early-stage companies such as What3Words, the geolocation start-up, and Tide, the business bank.

It is chaired by Sir Anthony Salz, the former Rothschild banker and City lawyer.

Dominic Perks, Hambro Perks’ co-founder, said at the time of HPAC’S listing in November 2021 that he had decided to list the vehicle in London in the wake of rule changes which meant the City could compete more robustly with New York and Amsterdam.

The SPAC, which raised nearly £150m from its initial public offering, had 15 months to secure a deal, meaning it faces a deadline next month to announce the merger or seek an extension from shareholders.

Hambro Perks has substantial experience of healthcare investment, having backed start-ups including Aide, a digital health service which helps patients manage chronic conditions, Genomics, a genetics-based drugs group, and Akamis Bio, a clinical-stage oncology company.

The SPAC boom in the US triggered the arrival on the public markets of dozens of companies, including Sir Richard Branson’s Virgin Galactic and Virgin Orbit,

A string of UK companies, including Babylon Health and Cazoo, the online car retailer, have merged with SPACs and subsequently seen their valuations plummet.

Rothschild is advising the Hambro Perks SPAC on the deal, while Istesso is being advised by Panmure Gordon.

HPAC and IP Group have both been contacted for comment.

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Flybe customers urged not to go to airport as carrier collapses and cancels all flights

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Flybe customers urged not to go to airport as carrier collapses and cancels all flights

Passengers due to travel with Flybe have been told not to go to the airport after the regional carrier ceased trading and all flights were cancelled.

The airline has gone into administration less than a year after returning to the skies following a previous collapse.

Ticket-holders were advised to check the Civil Aviation Authority website for further information or if they had booked through an intermediary to contact the relevant agent.

Flybe operated scheduled services from Belfast, Birmingham and Heathrow to airports across the UK and to Amsterdam and Geneva.

In a statement posted on its Twitter account, the airline said: “We are sad to announce that Flybe has been placed into administration.

“David Pike and Mike Pink of Interpath have been appointed administrators.

“Regretfully, Flybe has now ceased trading.

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“All Flybe flights from and to the UK are cancelled and will not be rescheduled.”

CAA consumer director Paul Smith said: “It is always sad to see an airline enter administration and we know that Flybe’s decision to stop trading will be distressing for all of its employees and customers.

“We urge passengers planning to fly with this airline not to go to the airport as all Flybe flights are cancelled.

“For the latest advice, Flybe customers should visit the Civil Aviation Authority’s website or our Twitter feed for more information.”

A government spokesman said: “This remains a challenging environment for airlines, both old and new, as they recover from the pandemic, and we understand the impact this will have on Flybe’s passengers and staff.

“Our immediate priority is to support people travelling home and employees who have lost their jobs,” a spokesperson said.

“The Civil Aviation Authority is providing advice to passengers to help them make their journeys as smoothly and affordably as possible.

“The majority of destinations served by Flybe are within the UK with alternative transport arrangements available.

“We recognise that this is an uncertain time for affected employees and their families.

“Jobcentre Plus, through its Rapid Response Service, stands ready to support any employee affected.”

Flybe had previously been pushed into administration in March 2020 with the loss of 2,400 jobs as the COVID-19 pandemic battered large parts of the travel market.

Its business and assets were purchased in 2021 by Thyme Opco, which is linked to US hedge fund Cyrus Capital.

Thyme Opco was renamed Flybe Limited.

It had been based at Birmingham Airport.

On the resumption of its flying operations last April, it planned to operate up to 530 flights a week across 23 routes, serving airports such as Belfast City, Birmingham, East Midlands, Glasgow, Heathrow and Leeds Bradford.

Have you been affected by the collapse of Flybe? Have the flight cancellations ruined your plans?

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Government homes in on £5bn cladding settlement with housebuilders

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Government homes in on £5bn cladding settlement with housebuilders

Michael Gove, the levelling up secretary, is closing in on a multibillion pound deal with Britain’s biggest housebuilders to help resolve the national cladding crisis exposed by the 2017 Grenfell Tower disaster.

Sky News has learnt that major companies including Barratt Developments and Persimmon are preparing for the imminent signing of a legally binding contract with the government that could ultimately cost the industry £5bn or more.

One executive said they expected the final contract to be signed and unveiled as soon as next week, although they cautioned that the timing remained fluid.

Last year, dozens of developers signed a pledge to fix buildings constructed since the early 1990s, with revisions to the deal with government in recent weeks having focused on the scope of companies’ exposure.

The City watchdog is thought to have been involved in discussions with the industry about whether signing the contract would require the approval of shareholders in listed companies such as Barratt, Persimmon and Taylor Wimpey.

Sources have estimated the cost of the new Residential Property Developers Tax at up to £3bn and the bill for self-remediation at around £2bn.

A further tax on the industry could raise £3bn, industry executives have concluded, leading some companies and investors to warn that the sector risks seeing a flight of capital.

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Earlier this month, the Department for Levelling Up, Housing and Communities said it was “finalising the legally binding contracts that developers will sign to fix their unsafe buildings, and expect them to do so very soon.

“We will not accept any backsliding on their commitments.

“It is building owners’ legal responsibility to make sure that all buildings are safe.”

Albert House, Woolwich, London, which has cladding that since the Grenfell disaster has been deemed un-safe
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Many buildings across the UK have been deemed to have unsafe cladding since the Grenfell Tower disaster in 2017

FTSE-100 housebuilders have already taken significant financial provisions in their accounts to prepare for the signing of the final government contract.

Some have flagged during recent earnings calls with analysts that they expected an imminent settlement.

“In signing the pledge, we’re saying that we essentially had a commitment that we wanted to sign up to the legal agreement,” David Thomas, Barratt’s chief executive, told analysts this month.

” There’s been a process of discussion regarding the legal agreement that has been ongoing since June last year, so we think we’re getting close to the government publishing the legal agreement, and we would expect in due course that we would sign up to that.”

Read more:
Grenfell inquiry finds shoddy workmanship and unsafe cladding

Homebuilders pledge to pay £5bn towards fire safety costs

Hanan says she still thinks of the tower as home
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The cladding on Grenfell Tower was found to have caused the fire to spread so quickly

A spokesman for the Home Builders Federation (HBF) said: “The pledge [signed last year] demonstrated the industry’s commitment to play its part in ensuring leaseholders don’t pay for work needed to make buildings safe.

“We have been working constructively with government to ensure the detailed contract reflects the commitments of the pledge and we await a final version.

“UK housebuilders are taking responsibility and are well progressed with remediating their own buildings and are already paying another £3bn to fund work on buildings built by foreign companies and others.

“Government now needs to deliver on commitments to secure contributions from foreign builders and the material providers at the heart of this issue and avoid targeting UK housebuilders further for buildings built by others”.

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