Triumph Bancorp Inc Annual Report 2021

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FY2021 Annual Report · Triumph Bancorp Inc

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ANNUAL
REPORT——’21
REWRITING
THE SCRIPT

T B A R – ’ 21

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STRATEGIC REPORT

TED BAKER TODAY
2

Chief Executive’s review
and introduction to Ted Baker

10 Our Chair, John Barton

Our business model

TAKING TED BAKER INTO THE FUTURE
12
14 — Our customers
16 — Design, source and make
18 — Sell
20

Our strategy

Chief Financial Officer’s introduction

REVIEW OF THE YEAR
22
24 Key performance indicators
26
Financial/operational review
34 Our sustainability story
35 — People
38 — Ethical sourcing programme
41 — Communities
42 — Planet
46 — Fashioning a better future
48
54 Viability statement and going concern

Risk report

GOVERNANCE REPORT

58 Board of Directors
60 Executive Team
62 Chair’s introduction to governance
63 Corporate governance
72 Audit & Risk Committee Report
76 Nominations Committee Report
80 Remuneration Report
94 Directors’ Report
97 Statement of Directors’ responsibilities

FINANCIAL STATEMENTS

100 Independent auditor’s report
106 Income statement
107 Statement of comprehensive income
108 Statement of changes in equity
110 Balance sheet
111 Cash flow statement
112 Notes to the financial statements
147 Five-year summary
150 Company information

T E D B A K E R TO D AY

For more than 30 years Ted Baker has taken everything the world has thrown
at it in its stride: the fickleness of changing fashions, the fortunes of boom and
recession, the revolving door of bull and bear markets. But it is no secret the
Company got itself into trouble in the last few years. We tackled these issues head
on at the end of 2019 and put together a transformation strategy to turn the Company
around. As we began to put the plan in place, the challenges the Company faced
were intensified by the onset of the pandemic.

Since the end of March last year, it has felt like a ride on a rollercoaster that is still
being built, as we hurtle towards the next gravity-defying loop. It has made what
would have been a difficult year for Ted Baker far more challenging. Yet we have kept
a collective level head and found a way through, ending this terribly challenging year
with a grip on the business and a clear transformation strategy in motion. And, despite
the difficult trading conditions, with much to celebrate and look forward to with
a refinanced business, we have an exciting new vision for our product which takes the
best of Ted Baker into the future, and an enduring love of the brand by our customers.

Read on as CEO Rachel Osborne tells the story of our year and our plans
for the future.

Ted Baker plc Annual Report and Accounts 2021

Rewriting the script:
transforming a business in a global pandemic

Quite simply, we began the year in a weak operational and financial
position. In March, the pandemic amplified some of these weaknesses
and has had a very obvious impact on our financial results. But, thanks
to the combined efforts of the management team and team members,
we faced up to the challenges and took action quickly. It started with
the successful sale and lease back of our London head office, the
Ugly Brown Building, and continued with a bank refinancing and an
equity raise which, thanks to the continued support and belief of our
shareholders, was hugely successful.

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“ ...thanks to the combined
efforts of the management
team and team members,
we faced up to the challenges
and took action quickly.”

Ted Baker plc Annual Report and Accounts 2021

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The ongoing support of lenders and our suppliers was
invaluable. As a result, the Group is in a strong cash
position thanks to our refinancing efforts and intensive
approach to cash management, which has given us the
time to focus on the key issues facing the brand and
the business.

Like many global lifestyle brands with a strong
physical store presence, the financial story of our year
doesn’t make for easy reading, but I believe we are in
a far stronger position today than we were 12 months
ago. The brand’s health is strong – we have fixed our
foundations and hit the FY21 key performance
indicators of our transformation strategy despite the
pandemic. We have a new corporate mission to be the
most engaging British lifestyle brand, which acts as
our compass to take the Group forward over the next
few years, supported by our values – being authentic,
curious, courageous, inclusive and kind. We have
also developed a new brand purpose that builds
on Ted Baker’s past and brings it up to date
for today’s customers.

“ We exist to create and
celebrate the unexpected
in the everyday.”

TURNING CRISIS TO OUR ADVANTAGE

There is no doubt that the pandemic caught the world
unprepared. The negative impact on trading from three
lockdowns has affected just about every bricks-and-mortar
retailer in the world. We were also hampered by product
that, with its focus on formal and occasionwear rather than
casual and leisurewear, was hit hardest by lockdown,
particularly in the important festive trading season.

The easing of restrictions gave little respite, with our city centres
empty and tourists virtually non-existent. Add in the challenges of
heavy discounting online across global markets and inevitably
margins are down, and our figures tell a frustrating trading story
that belies the progress we have made with our transformation
strategy. Here is an overview:

Group revenue was down year-on-year by 44.2%.1

With stores closed through lockdowns and some permanent
closures where we could not reach acceptable commercial
lease agreements with landlords, our reported retail sales
decreased 42.2%, reflecting the reductions in footfall.

Wholesale and licence revenue decreased by 48.7%.
This is a result of cautious ordering from store-based trustees
since the beginning of the pandemic; Brexit-related shipping
delays; and declines in certain product categories, particularly
in formalwear and luggage.

Ted Baker operated eCommerce sales increased by 30.2%,
and in the year we enhanced payment methods, improved
trading mechanics and increased investment in digital media.
Group eCommerce sales, which includes our partners,
increased 22.0% and represented 57.0% of total retail sales
(FY20: 27.0%).

1 Current year is a 53-week period to 30 January 2021 compared to

a 52-week period to 25 January 2020.

Ted Baker plc Annual Report and Accounts 2021

STRATEGICREPORT

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Ted Baker at a glance
As in any year, the headline numbers don’t tell the full story of
what we have achieved. These pages give a more rounded
picture of what has happened in Ted Baker over the last year.

Underlying loss before tax

£(59.2)m

Loss before tax -38.8%

£(107.7)m

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Sales -44.2%

£352m

Underlying gross profit margin -140bps

54.2%

Sales by region

1 UK & Europe
2 North America
3 Rest of the World

70.1%
29.2%
0.7%

Ted Baker plc Annual Report and Accounts 2021

Team members

2,158

Gender breakdown

eCommerce sales

£144.9m

1 Female
2 Male
Total

1,506 (69.8%)
652 (30.2%)
2,158

Increase in eCommerce

22.0%

eCommerce mix of retail sales

57.0%

Own stores

Sales by channel

72.3%
24.2%
3.5%

1 Retail
2 Wholesale
3 Licensing

Concessions

269

Outlets

Net cash at year end

£66.7m

Ted Baker plc Annual Report and Accounts 2021

STRATEGICREPORTd
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Brexit added to our challenges – we’re now expecting
£5 million of incremental costs associated with the deal agreed
by the UK government. These figures reflect extra duty costs,
after the mitigation of our new customs warehouse capability,
which is now up and running.

However, the good news is that our underlying financial
position at the end of the year is considerably better than we
expected in the middle of the year. Figures from our China joint
venture market, which are ahead of the UK, Europe and US
in coming out of lockdown, are encouraging for what the future
may hold for Ted Baker. Our China, Hong Kong and Macau
joint venture had full year sales growth of 6% (with growth
of 32% in mainland China) across stores and online channels,
as the region emerges from Covid-19 restrictions.

Our net available liquidity at year end (30 January 2021)
was £199.5 million, including £66.7 million in cash and
£132.8 million of bank facilities. This is ahead of our
expectations and in spite of the impact of the third UK lockdown.

As part of our strategy to strengthen the balance sheet, in March
2020 we reached an agreement to sell and lease back our
head office, the Ugly Brown Building, with gross proceeds
of £77.8 million. Alongside a bank refinancing, active capex
control and working capital discipline, we raised gross
proceeds of £105 million in a new equity issue in June 2020.
This gained strong support from our shareholders, many of
whom maintained or increased their shareholding, along with
new investors attracted by the capital raise. Their welcome
support meant we could move forward with confidence with our
transformation strategy. This included hitting our upgraded cost
savings targets of an expected £31.0 million of annualised
payroll savings in FY22 against FY20, and £8.0 million of
negotiated rent reductions in FY21. We also benefited from the
support of the UK government furlough scheme, along with
equivalent schemes around the world.

“ With the balance sheet
in good shape, we are
confident our three-year
transformation strategy
and our financial targets
will generate good
shareholder value
in the medium term.”

With the balance sheet in good shape, we are confident that
our three-year transformation strategy (Ted’s Growth Formula)
and our financial targets will generate good shareholder value
in the medium term. The overarching aim is to make Ted Baker
more profitable and more cash generative, and to drive higher
returns on capital employed.

From an operational perspective, we have considerably
strengthened our finance function under the leadership of
David Wolffe, who joined Ted Baker in January 2020.
Following the completion of the Deloitte LLP investigation into the
legacy issue of the overstatement of inventory that came to light
at the end of 2019, we set up an internal review (with external
support). As a result, we brought in new measures to strengthen
our control environment, and reorganised the finance function
quickly and efficiently, which allowed us to focus on moving the
business forward during the past year. For full details, please see
the Audit & Risk Committee Report on page 72.

These are just the headlines – you can read the full detail in
our Financial review on page 30.

Ted Baker plc Annual Report and Accounts 2021

FIXING THE FOUNDATIONS – A LAUNCH PAD
FOR THE FUTURE

The pandemic gave us additional impetus to speed up
the transformation strategy programme we had mapped
out in early 2020 and set in motion in June 2020. With
a strengthened balance sheet, we’ve been able to tackle
some of the fundamental areas with speed. Reassuringly,
the Ted Baker brand remains strong and much-loved by our
customers, and we can see opportunities for future growth.

Our people at every level are the key to our future success –
not least our strong leadership across every function. We have
strengthened our new Executive Team, improving our capabilities
across the board. To do this, we have hired some exceptional
leaders to key positions alongside Chief Financial Officer
David Wolffe. These include Anthony Cuthbertson as Global
Creative Director, who is revitalising our product and taking
the brand forward; Peter Collyer, our new Chief People Officer,
who is modernising our HR function; Chief Customer Officer,
Jennifer Roebuck, who is spearheading our customer, digital
and omnichannel growth; and Helen Costello, who brings
deep industry experience as Group Commercial & Business
Development Director. Ari Hoffmann also joined as Chief
Executive North America in the previous year, and brings
extensive retail and brand experience.

All of them have already made a real difference in bringing our
transformation strategy to life by focusing on three priorities:

ɫ Refreshing and re-energising our brand and product

ɫ Driving digital and capital-light investment to profitably
grow where the customer is, through an omnichannel
approach and leveraging licensing and partnerships

ɫ Hitting our cost-out targets.

Refreshing our brand, creative direction and product
Ted Baker continues to hold a special place in the hearts of
our customers, borne out by our positive brand-health scores.
Our mission is to be the most engaging British lifestyle brand,
building on the heritage of over three decades of unconventional
elegance. We aim to bring the unexpected to the everyday by
expanding our product range and relevance, bringing
our loyal customers with us and attracting new ones.

The thing that people love about Ted Baker as a brand is the
space it occupies between the unconventional and aspirational.
This contradiction is the thread that runs through everything the
brand does, giving us free rein to turn things on their head and
engage people with a unique combination of style, optimism
and discovery. At the same time, there is an elevated quality and
elegance to Ted Baker clothing – an exuberance that is part
of the brand DNA, that we will use to drive the brand forward.

Our recent brand refresh work identifies the joy in the everyday,
the gleaming details that make people feel happy and special.
It can be found throughout our products, from a hidden
message embroidered in a pocket or other small details only
the wearer would know about, to the elegant cut of a dress
or lapel and the boldness of a lining. And this stays with our
customers, creating a little everyday delight.

52%

Growth in total new customers

Since Anthony joined us in November 2020, he and his team
have been working tirelessly, inspired by our brand purpose,
to move our design and product forward to meet the changing
demands of our customers living through the pandemic and
beyond. There is a new focus on versatile and fashion-led
casualwear, and a wider and deeper range in accessories,
that brings greater relevance alongside our occasion and
event-led ranges. We are now designing to a product pyramid
and balancing entry price points alongside new higher range
items, with more seasonal focus balanced by core and
continuity ranges, topped off by a capsule collection – M/I/B.

Given the long lead times required for design, production and
distribution of premium clothing, customers will start to see some
early results of the evolving direction in May, June and July in the
Spring/Summer ’21 collection. Anthony’s first full collection will
land in Autumn/Winter ’21. We have been showing these ranges
in our newly redesigned showrooms and early feedback has
been very positive and encouraging. In the meantime, we are
looking at how we source products to reduce lead times, while
maintaining the quality and integrity we are known for.

Investing where the customer is: our digital and capital-
light transformation strategy
The digital and capital-light transformation strategy we began
last year has already shown encouraging signs of what is
possible for Ted Baker. We’ve seen some real wins with this
key element of our strategy, both in eCommerce and with our
licence partners investing their own money to support us in
building the Ted Baker brand.

With stores closed for much of the year and many people
working from home, it’s no surprise that eCommerce performed
well over the year. We have made significant improvements
to our digital experience with the backdrop of a fast-moving
market. This included a major upgrade of our payment options,
bringing in Apple Pay, Google Pay, Klarna and local payment
options. It also included introducing live chat/text and virtual
appointments with our store team members, and online
pre-booking of store appointments (when stores were open).
We have added cross-merchandise shopping capability and
sharpened our trading mechanics with more precise trading
campaigns. These, combined with our higher investment in
digital marketing to win new customers, have delivered an
active eCommerce customer growth in the year of 44.0%.

The momentum in eCommerce from the first lockdown carried
on over the year with improvements in our key metrics – total
customer numbers, winning new customers, our online
conversion rate and social media engagement. At the end
of the year, the brand continued building on this, with web
traffic up 31.6% and new customer growth of +49.0%.

Ted Baker plc Annual Report and Accounts 2021

STRATEGICREPORTd
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Another strand in delivering capital-light growth is our product
licensing business. This leverages the Ted Baker brand and
delivered £12.4 million of gross profit in FY21. Its potential
is huge. We signed two new product licence deals in the
financial year. Following NEXT’s successful start on our new
childrenswear licence, we decided that they would be the most
appropriate partner for our lingerie and nightwear. We have
also signed up Baird Group as our new licensing partner for
men’s formalwear in the UK and Ireland. (This deal mirrors the
successful relationship we have with Jack Victor in North
America.) As a result, Ted Baker will no longer directly supply
men’s formalwear, which reduces our inventory risk for this
product category and makes the most of our partners’ expertise
in sourcing and distribution.

We also strengthened our licensing partnership in bedding
and towels, signing a three-year deal with Bedeck starting in
January 2022. Their priority is to expand the global reach of
Ted Baker in this category. In the UK, the new collections will
be distributed through Bedeck’s wholesale network across
department stores, speciality home stores and independent
retailers, in addition to their own retail platforms and Ted Baker’s
online platform. Bedeck also supports international sales via
its distribution partners in countries including Australia, the
Netherlands and Germany, with potential to expand further.

As well as working with product licence partners to broaden
that part of our offering, we also have territory licence partners
who expand our reach geographically. We extended our
territory licence agreement with Al Futtaim Group in the Middle
East for another ten years. This amplifies our relationship to
include omnichannel distribution and an ambitious new store
opening programme in the region.

PT Mitra Adiperkasa (MAP) signed up as a new territory
licence partner for Indonesia. MAP has extensive retail and
brand experience in the Indonesian market and has ambitious
plans to grow the Ted Baker brand with us. The agreements
with Al-Futtaim and MAP as territory licence partners for
Middle East & North Africa and Indonesia, respectively, further
deliver on our strategic priority of driving digital and capital-
light growth. Licence partnerships are a key component
of Ted Baker’s three-year transformation strategy, which is
designed to deliver a business that is more profitable, more cash
generative and delivers a higher return on capital employed.

Following these new licence agreements, Ted Baker will have
17 retail licence partners and 20 product licence partners
across the globe, extending a proven operating model that
has supported our success as a global lifestyle brand.

Between them, territory licensees and joint venture partners
have opened 15 new stores in the year around the world,
including 7 in China.

521

Total Ted Baker branded stores and partner
concessions, including joint ventures and franchises

Ted Baker plc Annual Report and Accounts 2021

Cut to fit: our successful cost-out programme
One of the key issues we identified in our cost review at the
start of the year was that growth in operating expenses had
outstripped sales growth over a number of years, with central
and store costs above benchmark levels. This issue was
highlighted further by the onset of the pandemic, as we
brought in new ways of working. We began to undo years
of siloed working in order to reap the benefits of cross-
functional teamwork.

The programme has delivered expected annualised savings
across our central and retail store payroll of £31.0 million,
at a cash cost of £3.9 million, significantly lower than the
£6.0 million cost we anticipated in July. These savings
represent a 28% reduction and are higher than originally
planned and it is no exaggeration to say this has been
a challenging task, with many difficult decisions along the way.
Our people are the backbone of our business and it was with
a heavy heart that much of these cost savings had to come from
redundancies. Unfortunately it was the only way to keep the
business moving forward. Wherever possible we protected
customer-facing roles and we are grateful to all those who
remain with Ted Baker and continue to bring their passion,
dedication and enthusiasm for the brand to work every day.

Covid-19 and government restrictions effectively changed
consumer behaviour overnight and, like the rest of our industry,
our stores were hit by multiple lockdowns and social distancing
restrictions when open. We were particularly affected because
most of our stores are in large city centres near offices, with very
few in out-of-town retail parks, which, when open, saw less of
a decline in footfall. To offset this, we negotiated £8.0 million in
rent savings. This reflects the flexible nature of much of our retail
space. We will continue rent renegotiations across our estate to
reflect the new commercial realities as Covid-19 restrictions
ease in the coming months.

EVOLVING OUR ESG PROGRAMME:
LINING UP WITH THE WORLD ECONOMIC
FORUM FRAMEWORK

Part of Ted Baker’s enduring appeal is our care and concern
for where our clothes come from, who makes them and how
they are made. Today, the environmental, social and
governance (ESG) agenda is not just front of mind for many
customers, but also for investors and other stakeholders too.
We are therefore developing our vision ‘Fashioning a Better
Future’ for the role we want our brand and Company to play in
the world. We’re basing our approach on the World Economic
Forum framework, which focuses on three pillars: people,
prosperity and planet. We’ve made good progress in each
area this year and we are on track to meet our medium-term
sustainability objectives while we develop our long-term
vision – a key element being the development of a carbon
net zero strategy which we will launch in summer 2021.

Highlights of our ESG programme
ɫ People – we have mapped 100% of our subcontracting
units in our product supply chain and are committed to
publishing this data in the year ahead. We have also
created our inclusion strategy and launched a new career
levelling framework. And our new Learning Experience
platform was launched in March 2021.

ɫ Prosperity – 69% of our cotton is now from sustainable
sources, on track to be 100% sustainable by 2024. 17%
of our total collection is now sustainable. We are on track
for 100% of our leather to be supplied by Leather Working
Group businesses by 2025. We have strengthened the due
diligence of our ethical programme through membership of
Ethical Trading Initiative (ETI) and SEDEX.

ɫ Planet – we joined the British Retail Consortium’s Climate

Action Road Map and remain committed to setting Science
Based Targets to reduce our carbon emissions. We have
donated 100% of our unsold/damaged products for many
years, diverting 21 tonnes of product from landfill in the last
year; we are on track to using 100% of our eCommerce
cardboard packaging from FSC sources and 50% of plastic
packaging and hangers from recycled materials by 2022;
we use 100% renewable energy in our UK stores and our
head office, the Ugly Brown Building.

You can read more about our sustainability agenda on
pages 34-47.

69%

Cotton from sustainable sources

27%

Leather from LWG sources

Nil

Terminal stock going to landfill

WHERE NEXT FOR THE GROUP?

We have achieved so much in the year; we have fixed our
foundations and ended the year in a much stronger financial
position both in terms of our balance sheet and embedding
cost controls and working capital management controls.
We’ve made some great progress on our strategic initiatives
and delivered on our strategic KPls. The team has worked hard
and shown dynamism and agility throughout the year, despite
all the challenges of remote working, a highly uncertain trading
environment and the complexities of Covid-19.

Looking ahead to the future, we are starting to shift gear –
away from fixing the foundations and spending more time on
developing our runway for growth. We do this from a position
where our brand health has improved over the last year and is
as strong as it’s ever been. Ted Baker is a lifestyle brand and
we have permission from our customers to cover a broad set
of categories. We already play in many different categories
but are not yet getting our fair share of wallet. Our brand is
global and travels well but we have tiny market share and
relatively low brand awareness in many of our markets.
We have the potential to be much bigger. Ted Baker is still at
the very early stage of development in North America, China,
India and Germany. These markets offer huge opportunities
for us. And our digital transformation programme will see
dramatic improvements in our eCommerce capabilities,
which will open up new operating models and ways to
market in the digital ecosystem.

What is certain is this has been a year none of us will forget.
I’d like to thank the Board for their support and everyone on
the Ted Baker team, including all our partners and customers –
for keeping the faith and for their unfailing support of the new
Executive Team, many of whom have been only faces on
a screen so far. We couldn’t have done it (or continue to do it)
without you.

Rachel Osborne
Chief Executive Officer

Ted Baker plc Annual Report and Accounts 2021

STRATEGICREPORTn At the risk of stating the obvious, the last year has been hugely difficult for everyone,
o
both in life and in business. For Ted Baker, the timing of the pandemic and lockdowns
could not have been more difficult. With the internal challenges of the previous year
largely resolved, but still fresh in people’s minds, and the rapid escalation of Covid-19
restrictions in March 2020, these darkest of financial times had the potential to create
a perfect storm for the business.

t
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The second half of the year continued to heap challenge upon
challenge, with a backdrop of uncertainty and the continually
evolving government management of the pandemic and Brexit.
This had a very real impact on our retail operations, but I am
pleased to say everyone rose to those challenges. Excellent
progress has been made with the investment in our hitherto
weaker eCommerce operational capabilities, and we have
already seen solid improvements and return on that investment.

My Board colleagues and I have been impressed with the
work the team has done to refresh the Ted Baker brand,
creating a rallying cry for everyone in the business. They have
struck a real balance between bringing the brand up to date
for the times, as well as making great strides in sustainability,
while honouring the spirit that made Ted Baker so special in the
first place. Our product refresh works hand-in-hand with this
repositioning and I am excited to see how Anthony Cuthbertson
and his team take things forward.

I would like to thank the Board for all the hard work they have
put in over this difficult year. Each of my colleagues has worked
tirelessly to support and challenge the Executive Team through
every aspect of resetting the business. It takes time to settle into
a working pattern, and we were additionally hampered by the
virtual working circumstances. Nonetheless, we quickly built
a high level of trust and created a supportive relationship that
has helped to drive change through the business at speed.

All this speaks volumes about the resilience of both the
Executive Team, our team members and the Ted Baker brand.
We have learned many valuable lessons over the last year
and made significant changes to the business. Although it has
been extremely challenging at times, I and the Board are
hugely encouraged by the progress the business has made.
We continue to be excited about the possibilities for the
future of Ted Baker as we move forward with our
transformation strategy.

John Barton
Chair

,
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When I joined Ted Baker in July 2020, the world (and the
Group) had already moved on. The new Executive Team was
in place under the inspiring and steady hand of CEO Rachel
Osborne. Each new appointment has been a little victory in
its own right, bringing valuable experience and confidence
to the Company. By this time, not only was the transformation
strategy underway, but the team was also making real
progress implementing key actions, at a time when much
of the world had ground to a halt.

The team’s approach to fixing our financial foundations
involved implementing three crucial strategies: the sale and
re-leasing of our head office, which released significant funds,
coupled with a successful equity raise and refinance, all
in the midst of a pandemic. There is no doubt in my mind these
achievements made negotiating the financial turbulence and
almost impossible trading conditions of the rest of the year
manageable. As always, we could not have achieved any of
this without the ongoing belief and support of our shareholders.

The team successfully implemented the cost-out plan, together
with successful cash and working capital management, which
has had a great effect on stabilising our financial foundations.
Its success comes, of course, at the cost of a significant number
of jobs and I would like to take this opportunity to thank the
many long-serving team members who were part of the
redundancies and to wish them all the best for the future.
This was also hugely unsettling for the remaining team
members, who were already wrestling with the challenges
of working from home, and their continued enthusiasm and
dedication to the brand has been an inspiration.

10 Ted Baker plc Annual Report and Accounts 2021

O T

R
H

K
E F

E F

Ted Baker plc Annual Report and Accounts 2021

K I N

D B
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U

G T E
R
E

O T

a k e

d m

e a

R I N
el
d
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urc

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G T E
e ss m
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ur c u sto
ur b
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O
— O
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— D
ell
ur str a te
— S
O

6
1

8
2

K I N
2
1

4
1

There really is no other brand that delivers the creativity, charm and
quirkiness of Ted Baker. This golden thread has run through the brand
for more than three decades. We have grown steadily from our origins
as a single shirt specialist store in Glasgow, to the global brand we
are today. Our aim is to build on this to make Ted Baker the most
engaging British lifestyle brand in the world. We are here to create
and celebrate the unexpected in the everyday.

l The Ted Baker difference
e
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i
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estrengths
u
q
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u

1. Advantage Ted Baker – the brand
Our brand has been built over 30 years and remains strong.
We have boosted it with our new brand purpose: we are
here to create and celebrate the unexpected in the everyday.
Our approach to design, cut, colour, pattern and materials
delivers this in spades, with a sense of joy and uniquely British
wit and wonder, supported by the gleaming details that tell an
engaging and enduring story our customers love to be part of.

r
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O

2. Strength in numbers – historical investment
In the toughest year for business in living memory, we successfully
refinanced Ted Baker, put strong cash management processes in
place, accomplished an equity raise and the sale and lease back of
our head office, the Ugly Brown Building. Our net available liquidity
at year end (30 January) was £199.5 million, including £66.7 million
in cash and £132.8 million of bank facilities. This puts us ahead of our
expectations, in spite of the impact of the third UK lockdown, and
builds on our significant investment of >£65 million in the previous
five years, including IT, infrastructure, warehousing and retail.

3. Our most valuable asset – our people
Our people are the backbone of Ted Baker. The strength of the Ted Baker ‘family’ and
the commitment and passion of our team members have shone through this year, leading
us to deliver on all of our Year 1 transformation targets, as part of Ted’s Growth Formula.
We have launched new global company values, inspired by the authenticity, courage,
curiosity, kindness and inclusivity we see and want to develop more of in our people
every day. We are building a new Inclusion Strategy, to create a working environment
where diversity, inclusion and intersectionality are elevated; and we continue to invest
in the wellbeing of our people, through a global online Wellbeing Hub and 60 Mental
Health First Aiders trained to date. We are inspired by our team members who have built
their long-term careers at Ted Baker and were proud to present 93 long service awards
to team members around the world who have dedicated upwards of five years of service.

4. Transparent and fair – our supply chain
We are on track to hit our sustainability targets in the medium
term – 17% of our collections are now sustainable. 100% of our
leather will be sourced via the Leather Working Group by 2025.

5. Varied distribution and partnerships
We distribute through a strong mix of own stores, department stores,
concessions, wholesale, and retail and product licences. All this,
together with our joint ventures and online presence, allows us to
reach our customers through a wide variety of channels.

Our values

We have adopted a clear set of values, drawn from
the business itself rather than imposed from above.
They are reflected in, and underpin, everything we
do. During the pandemic, these behaviours have
come to the fore on every front, and they are at the
heart of our transformation strategy. We are always:

12 Ted Baker plc Annual Report and Accounts 2021

euse these strengths
w
w
o
H

Refreshing our clothes and accessories,
guided by the DNA of the brand

Design, source and make

Our Global
Creative Director,
Anthony Cuthbertson,
explains more
on page 16

Our customers
Retaining our current
customers and attracting
new ones

Chief Customer Officer,
Jennifer Roebuck, shares her
thoughts on page 14

Sell

How we reach our customers

Our Group Commercial
& Business Development
Director, Helen Costello,
explains more
on page 18

Retail — eCommerce — Wholesale — Licensing

e
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T

we deliver

For our shareholders
We have a small number of large
shareholders, along with many other
individual shareholders, who continue to
support our growth with their investment
and belief in our brand.

For our partners
They are a vital part of our business and
future plans.

We have over 200 wholesale partners,
20 product partners and 17 franchise
partners in 31 countries around the world.

We have 90 Ted Baker suppliers, from
Europe to Asia.

For our communities
We strive to give back to our communities
and wider society. We are working with
the British Retail Consortium (BRC) to
make social mobility in retail a reality
for thousands of people.

For our planet
We are developing a carbon net zero
strategy and we joined the BRC Climate
Action Road Map this year.

— Founding signatory of the WRAP Textile

2030 initiative

— Gave 21 tonnes of terminal stock to

charities rather than sending to landfill
— All our UK stores and the Ugly Brown
Building use 100% renewable energy.

AUTHENTIC

COURAGEOUS

KIND

CURIOUS

INCLUSIVE

Ted Baker plc Annual Report and Accounts 2021

STRATEGICREPORT

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Our customers: meeting the future
Ted Baker’s customers today and tomorrow
Everything we do, we do for them. We have a loyal cohort of
customers who truly love the Ted Baker brand. And we’re looking
to expand our reach to draw new, younger customers into our world.
Here our Chief Customer Officer, Jennifer Roebuck, shares her
thoughts about our current customers and how we plan to stay close
to them, while broadening our reach to new customers.

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“ Ted Baker has always
been focused on bringing the
unexpected detail, experience
and style to consumers. The
output of our refresh strategy
is focused on moving that
unexpected design and
experience forward just
enough to still feel relevant
to our core customers and
appeal to new customers.”

How do you attract new customers without putting off your
core customers?
As a premium global lifestyle brand, we’re not aiming for
a drastic change, just shifting down in age a little towards the
28-45 year old customers. We’re definitely not planning
on becoming a youth brand any time soon. There are lots of
moving parts we have to manage – it starts with building on
our strengths, refreshing our product and our brand to be more
relevant and versatile. It’s more about broadening the category
rather than trying to be all things to people of all ages.

How do our customers see the Ted Baker brand?
Our internal Net Promoter Score (NPS)* is in the top quartile;
external scores put us in line with our peers, including some
very well-known international brands. The handwriting of the
Ted Baker brand is instantly recognisable, and we are focused
on keeping that at our core as we refresh our product to make
sure we don’t alienate our core customers but can also attract
new ones. We validate our thinking about the brand with
quarterly Pulse reports, using simple things like word clouds to
get to the heart of our customers’ emotional sentiment towards
the brand. And their response is surprisingly emotive – normally
we would expect responses around style, utility and function
but our number one tag is ‘love’. This suggests an appreciation
of the quality, trust and service that underpin Ted Baker
as a brand. Looking back over the year, and considering
everything that’s happened, it’s a fantastic indicator of our
brand health.

* NPS measures customer perception on one simple question:

How likely is it that you would recommend Ted Baker to
a friend?

14 Ted Baker plc Annual Report and Accounts 2021

How do you plan to stay close to customers?
It’s all about ‘profitably growing where the customer is’ –
and that means across all channels. Over the last year we have
invested in our digital channels to bring them up to speed –
during the pandemic it has clearly become an even more vital
piece of the retail jigsaw. We’re working on giving customers
the best experience wherever they engage with Ted Baker,
while staying true to the brand and working out what the
digital store of the future might look like. The market is hugely
fragmented and competitive and there is a huge shift to digitise
everything in our industry, from supply chain to reporting,
operating model and distribution channels. Getting this right
will underpin our strategic ambitions to get the brand, product
and mix of product type right. We can’t afford to live in an echo
chamber, so we need to stay close to our customers and make
sure we deliver what they are looking for quickly, without
compromising quality or the integrity of the brand.

Who is the Ted Baker customer?

30% male

Age 35-55

70% female

ɫ Mid to upper income

ɫ Predominantly UK but increasingly
North America, Germany and
other parts of Europe.

Ted Baker plc Annual Report and Accounts 2021

STRATEGICREPORTd
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Design, source and make: the small things are the big things
Discover the gleaming details of our approach
New Global Creative Director Anthony Cuthbertson is leading Ted Baker’s creative
vision, embracing the past and moving the brand into a new era. Anthony and his
team are focused on delivering unexpecTED details and moments across the brand
and collections. Design is the heartland of the brand and Ted Baker has a new beat,
creating the most inspirational cultural mix in Britain today. We asked him to discuss
the opportunities (and challenges!) of his role.

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“ Now we have fixed our
brand foundations, it is
simpler to extend into
casualwear while retaining
that instantly recognisable,
premium Ted Baker look.”

How have you approached refreshing the collections?
It’s totally about refreshing the best of what we have from the
past – the strong brand and iconic pieces like the bow bags
and florals – while bringing it up to speed for today. We talk
about ‘stretching our DNA’, retaining the handwriting of the
brand but designing in a smarter way. We’re designing with
a clearer focus on core pieces and a specific pricing structure,
which we can easily expand into other areas. Now we
have fixed our brand foundations, it is simpler to extend into
casualwear while retaining that instantly recognisable, premium
Ted Baker look established by our formal and occasionwear,
with the little touches of colour and humour in the details. Things
like secret messages embroidered in the pocket of a jacket or
on the label that are something only the wearer knows about,
and makes them feel really special.

What is it about the clothes that gives Ted Baker its
premium positioning?
To maintain our premium positioning, it’s important to source
the best fabrics and other materials we can, but also to tell the
story behind them, so people understand what they are paying
for. We are working with some really tiny but mighty factories –
for example there’s a place that employs just 20 people, but
they do the best raw denim jeans. Or there’s a small sheepskin
manufacturer that makes the most fantastic sheepskin jackets.
Premium fashion has longer lead times, so, while we’ve been able
to get some fresh ideas running through the Spring/Summer ’21

16 Ted Baker plc Annual Report and Accounts 2021

The Ted Baker Factor: unique style in
every collection

We have a wide range of collections.
You name it, Ted Baker has it in standout style.

ɫ Menswear

ɫ Womenswear

ɫ Formalwear
ɫ Swimwear
ɫ Accessories
ɫ Bedding
ɫ Childrenswear
ɫ Eyewear
ɫ Footwear
ɫ Fragrance and
Skinwear

ɫ Gifting and
Stationery
ɫ Jewellery
ɫ Lingerie and
Sleepwear

ɫ Luggage
ɫ Neckwear
ɫ Rugs
ɫ Suiting
ɫ Technical

Accessories

ɫ Watches

collection, the first full collection from me and my team, bringing
all our ideas to life, will be Autumn/Winter ’21. And we’re
already working on our Spring/Summer ’22 collection, which
will show even broader thinking and is very much focused on
the future.

What challenges do you see ahead – and how do you feel
about them?
We have to be careful not to spread ourselves too thinly. So we
need to choose the right partners and stay focused on creating
the best from the past while always looking forward. It all
comes down to expressing the refreshed brand properly,
retaining our reputation for formal and occasionwear but also
changing things up to suit whatever the world looks like for our
customers when the pandemic is over. We also have to make
sure we have the right distribution channels in place. But this just
makes it more exciting. When I first met the management team,
everyone was eager for change. The past is the past and we
need to move on, or the brand won’t survive – it had started
to lose relevance a few years ago. Now we’re in the perfect
place to build on the successes of the past and some of the
historic best sellers, while creating new ranges that contain the
same DNA but really excite people. We’ve started to do that
with the M/I/B range and you’ll see it across all our ranges
and partnerships in the future.

Ted Baker plc Annual Report and Accounts 2021

STRATEGICREPORTd
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Sell: sign of the times
Attracting buyers and customers with a brand and design that resonates
We asked Group Commercial & Business Development Director Helen
Costello about the possibilities and opportunities of selling Ted Baker to
the trade – agents, distributors, suppliers, end clients and product licensing
partners – during, and beyond, the pandemic.

What do you think buyers (and by extension, customers)
are looking for from Ted Baker?
Beyond price, quality and clothes people really want to buy,
it comes down to creating or rekindling a genuine connection
with the brand. With all the uncertainties in the world, the big
high street and fast fashion brands just don’t resonate in the same
way. It’s a sign of the times. People are looking for an emotional
link to a brand and – very relevant to sales to trade and the
public – they want positivity. Buyers always say “Ooh, we love
the pink!” but then they buy the safe blacks, blues and greys.
But today we’re seeing sales of more colour, more pink – people
are being more adventurous. They want a bit of fun along with
quality and interesting fabrics, trims and finishes. From a selling
perspective, the openness, warmth and humour of Ted Baker
is a real sweet spot. People are not buying for buying’s sake,
they’re going to brands they feel part of, and trust; buying things
that are contemporary, but will stay in the wardrobe for longer.

How are buyers responding to the positive changes
at Ted Baker?
It’s very exciting, everyone – small clients, big clients, suppliers,
partners – wants us to succeed. The brand appeal is strong,
and the fresh eyes of the new Executive Team and the
strengthened financial position give them confidence that
Ted Baker is heading in the right direction. 95% of the
conversations I have with buyers end with them saying
“We love Ted Baker”! They want us to regain our success and
see us grow. The opportunity is to expand from people coming
for specifics – a special shirt or dress – to coming to see what
we’re up to and buying into the brand in a broader way.

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“ People are not buying
for buying’s sake,
they’re going to brands
they feel part of, and
trust, buying things that
are contemporary,
but will stay in the
wardrobe for longer.”

84 Own stores

33 Outlets

18 Ted Baker plc Annual Report and Accounts 2021

269Concessions

How has lockdown affected Ted Baker’s relationships
with buyers around the world?
It’s meant creating a virtual showroom and it requires focus,
agility and resourcefulness to walk people through the
collection efficiently. Somehow, we have to replace that
essential touch and feel of being in the showroom. It’s here our
reputation for quality stands us in good stead. People trust that
what they see will carry through into the quality of the clothes
themselves. I do think it’ll have some lasting effects though –
buyers probably won’t travel so much, they won’t need to
come to the showroom four times a year, so we can be more
focused and organised. Of course, we want to see them
face-to-face, but the virtual route will save them a lot of time
and money. I think we’ll see things settle into a natural balance
that makes the best of both real life and virtual worlds.

What is your focus this year?
To grow sales and global distribution, especially in untapped
markets with a commercial approach that balances quality
and quantity for our buyers. Also nurturing those external
relationships by building on the warmth, humanity and relevance
of the refreshed brand. It’s a new chapter for us and a chance to
reconnect and re-engage that will create a solid foundation we
can scale up from and ‘explode’ in a good way. It’s all about
getting back to being the brand that we deserve to be.

Bringing it all back home: how customers buy from us

Retail

521 stores and concessions worldwide

182 in the UK

99 in Europe

136 in North America (includes Canada)

31 in the Middle East

7 in Africa

57 in Asia

9 in Australasia

eCommerce

£144.9 million in sales generated by our eCommerce operations.

Wholesale

£52.4 million sales generated in the Rest of the World
outside North America.

£32.8 million in sales generated by North American
wholesale business.

Licence income

£12.4 million of gross profit from licensing around the world.

Our product licences include: Bedding; Childrenswear; Men’s
Underwear; Loungewear; Eyewear; Fragrance and Skincare;
Jewellery; Lingerie and Sleepwear; Luggage; Neckwear;
Rugs; Suiting; Ted’s Grooming Rooms; Technical Accessories;
Wallpaper; and Watches

17 retail licence partners in 31 territories around the world.

And we are constantly reviewing our licensing business to
make sure we work with the best in the business in their region.

Ted Baker plc Annual Report and Accounts 2021

STRATEGICREPORTy Capturing the brilliant, unexpected, joyous
g
moments that make up everyday British life
e
t
a
At the start of the year, it was clear the Ted Baker brand needed a bold
r
approach to fix the foundations and transform the business. The strategy we
t
s
developed then (launched as Ted’s Growth Formula) has evolved now we’ve
fixed the foundations and move into the next stage of rejuvenating our brand.
With a clear path out of lockdown and the success of the vaccine roll-out,
the world is ready for Ted Baker and we’re ready for the world.

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Our mission

Our brand purpose
What we are shooting
for and how our brand
purpose will guide us

To be the most engaging
British lifestyle brand

Creating and celebrating the unexpected in the everyday

Attract and
retain more
customers

Deliver the
unexpected in
the everyday

Expand our
product and
its relevance

Drive our digital
and omnichannel
growth

Profitably
grow where the
customer is

Building blocks
for growth
The drivers that will
help us continue
to grow

Deliver deeper and
broader relationships
with new and existing
customers, leading to
long and rewarding
connections that benefit
them and us.

ɫ Acquired 929,000
new customers

ɫ Increased customer
retention rate by
7.5% on rolling
12 months.

Wins in FY21
What we’ve
achieved so far

Re-energise the
brand and creative,
strengthening
unconventional/
aspirational positioning
through innovation and
consistency to increase
brand awareness and
consideration.

ɫ Brand refresh rolling
out across the
business, building
on the best
of Ted Baker’s
past, fashioned for
Ted Baker today
and Ted Baker’s
future

ɫ Ongoing brand love
from our customers.

Make clothing more
relevant to all day/
week occasions,
develop accessories,
footwear and big
licence partner
categories.

ɫ Appointment of new
Global Creative
Director whose first
collection will be
fully realised in
Autumn/Winter ‘21.

An eCommerce offering
that’s as good as our
online-only competitors,
delivering omnichannel
customer service and
experiences. An estate
of flexible, fit-for-market
stores.

ɫ Launch new
alternative
payment methods

ɫ Launch of Live

Commerce, first in
our peer group

ɫ Launched HERO

digital appointments.

Take the brand to our
current and new customers
in key markets through
profitable distribution
and services.

ɫ Review of licence

partners and signing
of top new partners,
including:

— UK: NEXT, Baird

Group, Bedeck

— China: rapid

growth of joint
venture business.

ɫ Built on solid financial
position thanks to the
continuing belief of
our shareholders,
as shown by our
successful equity
raise, and the sale
of the head office.

The Ted Baker Way:
How we do things in
our own unique way
to achieve our goal

Smarter
Innovation and forward thinking: digital and data-led business model, outward and forward-looking

Together
People: be part of Team Ted Baker – high-performing, capable, collaborative and energised

Simpler
Commerciality: create a financially disciplined, commercial, agile, and effective organisation

20 Ted Baker plc Annual Report and Accounts 2021

T
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REVIEW OF THE YEAR
22 Chief Financial Officer’s introduction
24 Key performance indicators
26 Financial/operational review
34 Our sustainability story
35 — People
38 — Ethical sourcing programme
41 — Communities
42 — Planet
46 — Fashioning a better future
48 Risk report
54 Viability statement and going concern

Ted Baker plc Annual Report and Accounts 2021

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Overcoming a year of obstacles to lay
the foundations for growth
Ted Baker has come through a year of extraordinary challenges and the
resulting financial headlines are substantial losses reflecting these exceptional
circumstances. With the difficulties of the previous year fresh in mind, we didn’t
start the year anticipating an easy ride; but as soon as the course of the
pandemic became clear, trading losses for the year became inevitable.
We have done everything we can to mitigate this by moving quickly on
key parts of our transformation strategy to protect the business.

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“ What the headline figures don’t
show is what we have done
this year to fix our financial
foundations and position
Ted Baker for the future.”

22 Ted Baker plc Annual Report and Accounts 2021

£66.7m

Net cash at end of January 2021

THE POSITIVE STORY BEHIND THE NUMBERS

What the headline figures don’t show is what we have done
this year to fix our financial foundations and position Ted Baker
for the future. Following the successful recapitalisation, our
balance sheet is now very robust and will see us through
whatever twists and turns the pandemic takes. We managed
our operating cash flow carefully to reinforce the balance
sheet. And we addressed our cost base to make Ted Baker
leaner and more agile.

Balancing costs
There is always a tough balance to strike between cutting costs
and maintaining capabilities and operational effectiveness.
Our cost-out programme took an annualised £31.0 million out
of our team member cost base but there were many challenges
to getting the right balance, especially around payroll costs.
We recognise the effect the loss of almost 1,000 jobs had, not
only on the people who left us but also on those who remain,
and I am grateful to them all for helping us through this difficult
year. We could not have achieved our transformation strategy
without the dedication of the current Ted Baker team, and
I would like to thank everyone who has risen to the challenge
of working more efficiently with fewer resources.

Keeping cash flow tight
We worked hard to balance the short-term challenges of cash
flow through the pandemic with ensuring the long-term health
of our business. We reduced our total number of suppliers and
worked closely with long-standing suppliers to improve terms,
extending timescales on delivery of pre-existing orders and
redefining payment terms. The outcome was very positive
for our business and reflects the trust we have built with our
suppliers. Our landlords also played an important part in our
cash management, sharing the pain of enforced closures and
working with us to resolve uneconomic leases.

Transforming our finance function
Aside from the work to strengthen our balance sheet, we also
began the transformation of our finance function to ensure it is
an effective business partner, efficient, a guardian of business
risk and controls, and fit to support our transformation strategy.
We centralised our finance activities in London and New York
and closed our finance unit in California. This not only saved
costs, but gave us greater control for consistently better quality
financial reporting. We also reconstituted our risk register and
embraced a controls remediation programme that followed
2019’s stock overstatement issue, supported by Deloitte LLP.
Part of that was to bring the internal audit function back
in-house, which significantly improves our governance by
giving us greater oversight and control.

KEEPING UP THE MOMENTUM

As much as this Annual Report is about reflecting on the year
just gone, it’s also about looking forward. Although we’re
seeing trade opening up as the vaccination programmes take
shape, Covid-19 is not over yet, and we must remain vigilant
and responsive to a rapidly changing world. We’ve been
working hard to understand different potential scenarios
and are basing our financial projections on the cautious side,
knowing that, with our cost base reduced and our strong
balance sheet, we are in a good position to trade profitably
whatever the future may bring.

As the world opens up, these strong financial foundations,
along with the exciting new design vision of our global
Creative Director and our stronger eCommerce platform,
give me every confidence that this future will be a positive
one for Ted Baker.

David Wolffe
Chief Financial Officer

Ted Baker plc Annual Report and Accounts 2021

STRATEGICREPORTt

s How we measure progress
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We review the ongoing performance of the Group against
key performance indicators (KPIs) across financial, strategic
and sustainability factors. Below are the KPIs that the Board
judges to be most effective in assessing the business.
These are considered in more detail in the report.

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24 Ted Baker plc Annual Report and Accounts 2021

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Brand sales

£710.8m

-42.2%

FY21
FY20

FY19

£710.8m

£1,230.0m

£1,300.2m

Underlying gross margin

54.2%

FY21
FY20

FY19

Net debt/cash

-1.4%

54.2%
55.6%

59.8%

£66.7m

+152.5%

FY21
FY20

FY19

Revenue

£66.7m

£(127.1)m
£(123.8)m

£352.0m

-44.2%

FY21
FY20

FY19

£352.0m

£630.5m

£639.6m

(Loss)/profit before tax

£(107.7)m

-38.8%

FY21
FY20

FY19

£(107.7)m
£(77.6)m

£30.7m

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Bought in margin improvement

Target: <100

Consolidation of supplier
base from +150

Progress: 90

suppliers at year end

Focus on working capital efficiency

Target: 2 years

Reduce stock cycle from
three years

Progress: 2 years

Fully embedded two-year
cycle

Reduce expenditure and improve
retail store profitability

Target: £27m

People cost savings on
an annualised basis

Progress: £31m

Delivered on an
annualised basis

Target: £15m

Annual Capex limit

Progress: £7m

Capex limit achieved

Increase controls

Target

Progress

Implementation of
new improved control
environment

Actioned recommendations
from external advisors on
controls

Target

Progress

Simplified organisational
structure

Created new global finance
structure to drive effectiveness

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People

Suppliers
Target: 100%

Tier 1 factories meet
or exceed Ted Baker’s
minimum ethical
requirements

Transparency
Target: 100%

Map supply chain for
greater traceability

Prosperity

Communities
Target: 100%

Unsold or damaged stock
diverted from landfill

Planet

Materials

Progress: 100%

– Refreshed and published
all key ethical policies

– Ethical audits on all
tier 1 factories.

Progress: 100%

– All tier 1 factories mapped

and published

– All subcontractors are
mapped and meet our
ethical requirements.

Progress: 100%

Donated to charity partners

Target: 100% of our materials

will be sustainably sourced by 2030

FY21

17%

2030 target

100%

Target: 100% of our cotton

will be from sustainable sources by 2024

FY21

2024 target

69%

100%

Target: 100% of our regenerated cellulosic

fibres will be sustainably sourced by 2025

FY21

16%

2025 target

100%

Ted Baker plc Annual Report and Accounts 2021

STRATEGICREPORT

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Business review
The Covid-19 pandemic had a significant impact on the Group’s
performance, resulting in stores remaining closed for a large
proportion of the year and depressed in our key markets.

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CHANNEL PERFORMANCE

Retail
Our retail channel comprises stores, concessions and
eCommerce, providing an omnichannel experience.
We operate stores and concessions across the UK, Europe,
North America and South Africa, and localised eCommerce
sites in the UK, continental Europe, the US, Canada and
Australia. We also have eCommerce businesses with many
of our concession partners. Our stores are important to the
success of our digital businesses through supporting brand
awareness and showcasing our products. The relatively high
number of concession locations and short lease length on our
stores (averaging 3.5 years) allow us to maintain a flexible
business model.

The performance of the retail business reflects the
unprecedented trading conditions across the world, with stores
remaining closed to comply with local lockdowns, particularly
during the first half of the year. Where they remained open,

footfall was significantly below normal levels. Demand shifted
onto online channels, with eCommerce sales increasing to
57.0% (2020: 27.0%) of total retail sales in the year. Store
performance improved in the second half as the impact of
lockdown and trading restrictions was reduced, particularly
in the run-up to the peak Christmas trading period.

We have continued to review and refine our store portfolio
in line with new trading conditions. Given lower footfall, and
despite discussions with landlords to renegotiate rent, we
determined that several locations would no longer be viable
to operate and could be exited cost-effectively. We closed
four stores during the year, contributing to a reduction in the
average retail square footage of 4.8% to 421,435 sq ft (2020:
442,790 sq ft). This follows the transfer in the second half of
FY20 of 14 stores in China and Hong Kong to joint ventures
and 4 stores in Japan to a licence partner. These stores
generated £9.0 million in sales during 2020.

Group

Revenue

53 weeks ended
30 January 2021

52 weeks ended
25 January 2020

Variance

Constant currency
variance1

£352.0m

£630.5m

(44.2%)

(44.1%)

Gross margin (excluding non-underlying items)

Operating contribution (excluding non-underlying items)*

Operating (loss)/contribution margin**

(Loss)/profit before tax (excluding non-underlying items)
as a % of revenue

(Loss) before tax as a % of revenue

54.2%

(14.1%)

(28.1%)

(16.8%)

(30.6%)

55.6%

(140) bps

2.9%

(1,700) bps

(9.5%)

(1,860) bps

0.8%

(1760) bps

(12.3%)

(1,830) bps

Retail

Revenue

eCommerce revenue

Gross margin

Average square footage***

Closing square footage***

Sales per square foot including eCommerce

Sales per square foot excluding eCommerce

Wholesale

Revenue

Gross margin

Licensing

Revenue

£254.3m

£439.9m

£144.9m

£118.7m

(42.2%)

22.0%

(42.1%)

22.1%

57.5%

59.9%

(240) bps

421,435

442,790

411,602

438,483

603

260

994

725

(4.8%)

(6.1%)

(39.3%)

(64.2%)

(39.2%)

(64.2%)

£85.3m

£171.5m

(50.3%)

(48.6%)

37.6%

39.8%

(220) bps

£12.4m

£19.0m

(34.5%)

*Operating contribution/(loss) (excluding non-underlying items) is defined as operating profit/(loss) before non-underlying items as a percentage of revenue.

**Operating contribution margin is defined as operating profit/(loss) as a percentage of revenue.

***Excludes licence partner stores.

1 Note: Constant currency comparatives are obtained by applying the exchange rates that were applicable for the period ended 25 January 2020 to the

financial results in overseas subsidiaries for the 53 weeks ended 30 January 2021 to remove the impact of exchange rate fluctuations.

26 Ted Baker plc Annual Report and Accounts 2021

During the first half the Group furloughed store colleagues
in response to government-imposed lockdowns. As it became
apparent that market demand was likely to remain weak for
the remainder of the year, we reviewed the store staffing model
and a significant number of roles were made redundant to
ensure that stores remained viable. We benefited from
government support, such as business rates holidays and job
support schemes, as well as rent savings and waivers through
negotiations with landlords and reductions in turnover-related
rent. Driving business through our online channels, as well as
the highly offer-driven market through the year, necessitated
some increased expenditure on marketing and promotions.
As a result of all the cost movements combined, retail operating
costs excluding non-underlying items decreased by 28.7% to
£165.5 million (2020: £232.2 million).

Wholesale
Our wholesale business in the UK serves countries across the
world, primarily in the UK and Europe, as well as supplying
products to stores operated by our territorial licence partners.
In addition, we operate a wholesale business in North America
serving the US and Canada.

Wholesale sales decreased by 50.3% (48.6% in constant
currency1) to £85.3 million (2020: £171.5 million) as our
wholesale trustees’ businesses were also affected by Covid-19.
Margin was adversely affected by the discounts we offered to
support a number of key trustee businesses and an increase in
the mix of off-price product, which contributed to the reduction
in wholesale gross margin to 37.6% (2020: 39.8%) in the period.

LICENCE INCOME IN REVENUE

We operate both territorial and product licences. Our licence
partners are carefully selected as experts in their field and
share our passion for unwavering attention to detail and firm
commitment to quality.

Territorial licences cover specific countries or regions in Asia,
Australasia, Europe, the Middle East, Africa and Central
America, where our partners operate licensed retail stores
and, in some territories, wholesale operations.

Product licences cover Bedding; Childrenswear; Men’s
Underwear; Loungewear; Eyewear; Fragrance and Skincare;
Jewellery; Lingerie and Sleepwear; Luggage; Neckwear;
Rugs; Suiting; Ted’s Grooming Rooms; Technical Accessories;
Wallpaper; and Watches.

Licence income decreased by 34.5% to £12.4 million
(2020: £19.0 million). Product licence income was affected by
the challenging trading environment and particularly impacted
in formalwear, adversely affected by the increase in working
from home, as well as the replacement of existing agreements
for watches and childrenswear with new partners. Royalty
payments from regional franchise operators were also
impacted by the restrictions on trading and lower sales levels,
particularly in the Middle East and Asia.

COLLECTION PERFORMANCE

Ted Baker womenswear sales decreased by 40.7% to
£219.7 million (2020: £370.4 million) and represented 64.7%
(2020: 60.6%) of total sales. Ted Baker menswear sales were
down 50.3% to £119.8 million (2020: £241.1 million) and
represented 35.3% of total sales (2020: 39.4%). Demand for
more formal styles and occasionwear was particularly affected
by lockdown, and these represent a greater proportion of the
menswear range.

Ted Baker plc Annual Report and Accounts 2021

STRATEGICREPORTd
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United Kingdom and Europe

53 weeks ended
30 January 2021

52 weeks ended
25 January 2020

Revenue (including licensing)

£246.8m

£422.6m

Total retail revenue

Store revenue

eCommerce revenue

£181.9m

£296.9m

£67.3m

£202.3m

£114.6m

£94.6m

Average square footage*

276,437

284,533

Closing square footage*

269,283

291,557

Variance

(41.6%)

(38.7%)

66.7%

21.2%

(2.8%)

(7.6%)

Constant currency
variance1

(41.7%)

(38.9%)

67.0%

21.0%

£181.9m

Total retail
revenue

Sales per square foot including
eCommerce sales

Sales per square foot excluding
eCommerce sales

Wholesale revenue

Own stores

Concessions

Outlets

Partner stores/concessions

Total

£658

£1,043

(36.9%)

(37.1%)

(66.0%)

(48.4%)

£244

£711

£52.4m

£106.7m

205

281

242

321

(65.7%)

(50.9%)

(2.2%)

(15.3%)

(4.5%)

(9.1%)

(12.5%)

Lockdowns in several territories meant that our stores had to remain closed for parts of the year, with
footfall remaining depressed even when stores were open. City centres and areas traditionally popular
with tourists were the most badly affected. As a result, retail sales in the UK and Europe decreased by
38.7% (38.9% in constant currency1) to £181.9 million (2020: £296.9 million), with eCommerce sales
increasing to represent 63.0% (2020: 31.9%) of the total. Many of our trustees and licence partners
were also impacted by the challenging trading conditions, driving sales from our UK wholesale
business lower by 50.9% (48.4% in constant currency).

North America

Revenue

Total retail revenue

Store revenue

eCommerce revenue

Average square footage*

Closing square footage*

Sales per square foot including
eCommerce sales

Sales per square foot excluding
eCommerce sales

Wholesale revenue

Own stores

Concessions

Outlets

Partner stores/concessions

Total

53 weeks ended
30 January 2021

52 weeks ended
25 January 2020

£102.8m

£194.6m

£69.9m

£39.7m

£30.3m

137,894

135,215

£129.8m

£107.7m

£22.1m

138,152

139,822

Variance

(47.2%)

(46.1%)

(63.2%)

37.2%

(0.2%)

(3.3%)

Constant currency
variance1

(46.7%)

(45.6%)

(62.8%)

38.3%

£69.9m

Total retail
revenue

£507

£939

(46.0%)

(45.5%)

(62.7%)

(48.9%)

£288

£780

£32.8m

£64.8m

136

140

(63.1%)

(49.3%)

(7.9%)

(3.8%)

(2.9%)

In comparison to the UK & Europe, disruption to trading in North America stores started later, and
the adverse impact on demand from Covid-19 was supplemented by political and social unrest.
We closed three stores during the year, where the economics of reopening were unattractive, and
renegotiated leases to further improve profitability in a number of other locations. This contributed
to a drop in retail sales of 46.1% (45.6% in constant currency1) to £69.9 million (2020: £129.8 million).
Our eCommerce business delivered a strong performance, with sales increasing by 37% to £30.3 million
(2020: £22.1 million); eCommerce sales represented 43.3% of total retail sales (2020: 17.0%).

28 Ted Baker plc Annual Report and Accounts 2021

Rest of the World

Revenue

Total retail revenue

Store revenue

eCommerce revenue

Average square footage*

Closing square footage*

Sales per square foot including
eCommerce sales

Sales per square foot excluding
eCommerce sales

Own stores

Concessions

Outlets

Partner stores/concessions

Joint venture locations

Total

£2.4m

–

7,104

£337

104

53 weeks ended
30 January 2021

52 weeks ended
25 January 2020

Variance

(82.0%)

(78.6%)

Constant currency
variance1

(79.8%)

(76.1%)

(100.0%)

(64.7%)

£2.4m

Total retail
revenue

£13.3m

£11.2m

£2.1m

20,105

7,104

£662

(49.1%)

(42.9%)

£558

(39.6%)

(32.3%)

102

(4.8%)

40.0%

2.0%

The reduction in sales outside of our core European and North American businesses reflects the
evolution of our distribution strategy.

In the second half of FY20, we transitioned our businesses in China (including Hong Kong S.A.R.
and Macau S.A.R.) to a joint venture, covering 14 stores and concessions, and eCommerce, with the
income from these businesses now reflected in other income.

In China, our venture’s expansion plans have been delayed by Covid-19, but managed to open
seven stores during the period, and now operates 21 stores and concessions across the region
(2020: 15 locations).

In Japan, we announced an agreement with our licence partner Sojitz Infinity in August 2019, and
transitioned operations into the partnership during the second half of FY20. Our partner opened three
new stores, and now operates seven stores and concessions across the region (2020: four locations).

The joint venture with our Australian licence partner, Flair Industries Pty Ltd, operates nine stores in
Australasia (2020: nine stores).

* Excludes licence partner stores.

1 Note: Constant currency comparatives are obtained by applying the exchange rates that were applicable for the period

ended 25 January 2020 to the financial results in overseas subsidiaries for the 53 weeks ended 30 January 2021 to remove
the impact of exchange rate fluctuations.

Ted Baker plc Annual Report and Accounts 2021

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Financial review

While a proportion of demand shifted to online channels, this
was not enough to compensate for the shortfall in store sales
in the year. As a result Group revenue decreased by 44.1%
(43.8% decrease in constant currency1) to £352.0 million (2020:
£630.5 million) for the 53 weeks ended 30 January 2021.

This reduction in revenue was particularly marked during
Quarter 2 when the full impact of lockdowns began to bite
internationally and affected all channels, especially wholesale.

Gross margin before non-underlying items was 54.2%
(2020: 55.6%). At a trading level, the impact of falling demand,
restrictions on store trading and retailers’ need for cash was that
the market became highly promotional. This was particularly
pronounced during the first half, as we acted to clear stock
and drive additional cash. Margins improved substantially
during the second half as stores in the UK and Europe
re-opened and inventory levels were brought in line. The
second half improvement was limited, however, as sales
of higher margin categories occasionwear and outerwear
remained below normal levels on account of increased
working from home and reduced opportunities for socialising.

The Group reacted rapidly to unprecedentedly challenging
conditions of rapidly shrinking sales by reducing operational
expenditure, furloughing staff in both stores and head office,
utilising support schemes offered by the UK and other
governments and initiating cost control and restructuring
programmes. Excluding non-underlying costs, distribution
costs, which comprise the cost of retail operations and
distribution centres, decreased by 28.0% to £175.9 million
(2020: £244.1 million), and administration expenses
decreased by 19.6% to £71.0 million (2020: £88.3 million).
These decreases resulted from the implementation of cost
savings initiatives in the business, including:

ɫ Making headcount reductions in store and head office
permanent staff, where appropriate, saving £31 million
on an annualised basis

ɫ Initiating discussions with our landlords to abate fixed rent
during the closure periods and reduce rent thereafter to
reflect lower levels of footfall. This generated savings of
£8.0 million in the year.

Year-on-year change in sales (FY20-FY21)

Retail

Wholesale

Licensing

Total

-10

-20

-30

-40

-50

-60

-70

-80

-34

-33

-31

-27

-36

-40

-39

-38

-46

-47

-45

-75

1 Note: Constant currency comparatives are obtained by applying the exchange

rates that were applicable for the period ended 25 January 2020 to the
financial results in overseas subsidiaries for the 53 weeks ended 30 January
2021 to remove the impact of exchange rate fluctuations.

30 Ted Baker plc Annual Report and Accounts 2021

LOSS/PROFIT BEFORE TAX AND NON-UNDERLYING
ITEMS AND LOSS/PROFIT BEFORE TAX

The loss before tax was £107.7 million (2020: loss of
£77.6 million). The loss before tax and non-underlying items
was £59.2 million (2020: profit of £4.8 million).

NON-UNDERLYING ITEMS

Non-underlying items before tax in the period
amounted to £48.6 million (2020: £82.4 million)
and comprised the following items expenses/(income):

£(59.2)m

Loss before tax and
non-underlying items

Included in cost of sales:

Inventory changes in estimates

Change to inventory obsolescence provision

Onerous contract provision

Other

Included in gross profit

Included in distribution costs:

(Loss) on disposal of business

Impairment of intangibles, property, plant and equipment and
right-of-use assets

Other closure costs

Included in administrative costs:

53 weeks ended
30 January
2021
£’000

52 weeks ended
25 January
2020
(restated)
£’000

(6,065)

–

(1,973)

(32,351)

(13,539)

–

2,221

(7,957)

(43,669)

–

(7,585)

(45,303)

(13,969)

–

(603)

Acquisition costs and unwind of fair value accounting adjustments

(1,987)

(4,710)

Reorganisation, restructuring costs and other legal and
professional costs

Included in other operating (loss)/income:

Gain on sale and leaseback of head office

Included in operating profit

Included in share of post-tax profits from joint venture:

Unwind of fair value adjustments

Included in finance income/(expense):

(11,415)

(7,852)

17,446

–

(49,216)

(78,388)

(7)

(989)

Foreign exchange on the translation of monetary assets and liabilities
denominated in foreign currencies

Non-underlying items

655

(3,026)

(48,568)

(82,403)

Note: details of the restatement and of the above items can be found in the notes to the financial statements.

Ted Baker plc Annual Report and Accounts 2021

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FINANCE INCOME AND EXPENSES

Net finance expenses were £7.7 million (2020: £15.5 million).
The IFRS 16 interest expense for the period was £6.8 million
(2020: £8.3 million). Excluding the impact of non-underlying
items, net finance expenses were £8.4 million (2020:
£12.4 million).

TAXATION

The Group tax credit for the period was £21.3 million (2020:
credit of £9.4 million). This effective tax rate is lower than the
UK tax rate for the period of 19% primarily due to the Group
being loss making in territories where it has major market
operations and due to the utilisation of previously unrecognised
tax losses in territories with higher tax rates.

CASH FLOW

BORROWING FACILITIES

Across the year our net cash (net debt) position improved
dramatically. This measure represents the total of our cash
balances less debt outstanding. We began with net debt
of £(127.1) million and closed the year with net cash of
£66.7 million. This positive movement of £193.8 million
in net cash came about as a result of our successful
recapitalisation of the business combined with active
working capital management.

We took prompt action to support the Group’s cash position,
to ensure it has sufficient resources to trade through an
extended period of weak demand while investing in profitable
growth. We brought in additional financing through the sale of
the Ugly Brown Building for gross proceeds of £77.8 million
and the issuance of £105.0 million new equity (gross) through
the allotment of 140 million new shares.

The Group’s working capital position was also reviewed.
Actions to maintain cash and manage liquidity included:

ɫ Increased sell-through and liquidation of older, excess stock

ɫ Significant intake reductions to align stock levels

with demand

ɫ Agreeing extended payment terms with suppliers

ɫ Deferral of rental payments.

As a result, net working capital, which comprises inventories,
trade and other receivables and trade and other payables,
decreased by £68.3 million to £34.4 million (2020:
£102.7 million). Continued tight cash management ensured
that, despite a second UK lockdown during December and
January, net cash outflow was minimal during the second half.

Group capital expenditure of £7.0 million (2020: £25.8 million)
has been significantly reduced. We are continuing to invest in
systems and infrastructure to support our digital businesses and
improve efficiency, but investment on physical locations has
been limited only to essential works.

The Group’s net cash balance at 30 January 2021 was
£66.7 million (2020: net debt £127.1 million). On 23 March
2020, the Group announced that its lending bank syndicate
agreed to increase the headroom under the Group’s revolving
credit facilities of £180.0 million (Facility A), by a further
£13.5 million until 18 December 2020 (Facility B). On 20 May
2020, the lending bank syndicate agreed to increase the
headroom under Facility B by a further £11.5 million, taking the
total Facility B facility to £25.0 million, with a revised Facility B
expiry date of 18 January 2022.

The additional facility announced on 23 March 2020 was
made available in conjunction with the exchange of contracts
for the sale of Big Lobster Limited, a wholly owned Group
subsidiary, which owns the Group’s head office in London.
In connection with the sale, the Group entered into a short-term
ease of the property for a period following completion from
1 June 2020 to 31 March 2023. The consideration from
the sale was £77.8 million paid in cash by the buyer on
completion, in June 2020. The net proceeds of the sale of
£72.2 million, after fees and taxes, was applied to repay
existing indebtedness under Facility A to significantly de-lever
the Group. The remaining available facilities totalled
£132.8 million, with £107.8 million in Facility A and
£25.0 million in Facility B.

On 25 May 2021 the Group announced that it had signed an
extension to its revolving credit facility with its existing lending
syndicate. The new agreement extends the revolving credit
facility maturity from September 2022 to November 2023
and amends the covenants. Under the new agreement, the
existing Facility A of £107.8 million maturing in September 2022
and Facility B of £25.0 million maturing in January 2022, will
be replaced by a new RCF of £90.0 million reducing to
£80.0 million in January 2022 until maturity in November
2023. The existing lending syndicate continues to show
ongoing support to the Group.

The amended revolving credit facility includes among other
changes amendments to the quarterly covenant tests on
adjusted EBITDA, leverage ratio and fixed charge cover,
providing further financial flexibility for the Group.

32 Ted Baker plc Annual Report and Accounts 2021

TREASURY RISK MANAGEMENT

The most significant exposure to foreign exchange fluctuation
relates to purchases made in foreign currencies, principally the
US Dollar and the Euro.

A proportion of the Group’s purchases are hedged in
accordance with the Group’s risk management policy, which
allows for foreign currency to be hedged for up to 24 months in
advance. The balance of purchases is hedged naturally as the
business operates internationally and income is generated in
the local currencies. The Group is also exposed to movements
in foreign exchange rates on intercompany balances
denominated in a foreign currency. These are not hedged.
In March 2020, the Group exited its foreign exchange
contracts to crystallise a cash gain of £6.9 million, and as
a result, the Group’s foreign exchange risk was unhedged for
most of FY21. At 30 January 2021, the Group held foreign
exchange contracts for the right to purchase USD.

The Group is exposed to movements in UK interest rates as
the revolving credit facility accrues interest based on floating
LIBOR plus a margin. The Group does not hold any interest rate
hedge contracts.

BREXIT

The Group undertook significant preparatory steps for
Brexit on 1 January 2021 at the end of the current transitional
period, and despite the challenging timing of the deal between
the UK government and European Union, we have put in
place a number of administrative and legal changes to our
operational processes to mitigate the impact of Brexit. To date,
the main operational impacts have been the flow of goods into
the UK through the ports, and from the UK to stores and
customers in Europe.

We have set up a customs warehouse in the UK, which
became operational in April 2021 and has partially mitigated
the impact of higher duties, but there remain a number of other
areas outstanding, including rules of origin and reclamation
of input VAT. We expect that a full year impact of Brexit on
profits will be c.£5 million, and anticipate, only to a limited
extent, mitigating the extra cost of duties through the reflowing
of inventory for our EU stores.

EARNINGS PER SHARE AND DIVIDENDS

The basic loss per share was 56.2p (2020: loss per share
153.0p). Underlying loss per share, which excludes non-
underlying items, changed by (489.6%) to 26.0p (2020:
earnings per share 6.7p).

Given current trading conditions and the high level of
uncertainty about the future, the Board has determined that
no final dividend is to be paid (2020: 40.7p). In the long
term we remain committed to paying dividends and returning
surplus cash to our shareholders.

David Wolffe
Chief Financial Officer

£193.8m

Net increase in cash (net debt)

Ted Baker plc Annual Report and Accounts 2021

STRATEGICREPORTy Creating an amazing company for today and tomorrow
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We believe in an open and honest way of doing business. This includes taking
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care of all our stakeholders throughout our supply chain and operating in a fair
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and sustainable manner. ‘Fashioning a Better Future’ is our mission statement around
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our work in ethics and sustainability. But we know this work should not stand alone.
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It must be integrated into how we do business, from the top down, bottom up and
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across the whole Company.

At the heart of this is the way we treat our people and the
planet. It is critical to Ted Baker’s future success. To sharpen our
focus on this, we have aligned our programmes and policies
around the World Economic Forum’s environmental, social and
governance (ESG) framework, which is based on three pillars:
people, prosperity and planet. Our ESG matrix (see page 46)
is a working plan that we’ll deliver against over the next
12-18 months.

To keep ESG front of mind throughout our business, we have
started to break down barriers that force people to work in
silos. The first step was to bring Ted Baker’s People team and
CommitTED team together in 2020, under the leadership of
Chief People Officer, Peter Collyer. (The CommitTED team is
responsible for ethics and sustainability.) This makes it simple
for these teams to work closely to make progress towards our
ESG commitments. Whether they are our own team members
or from our supply chain, we must all hold ourselves
accountable to the same values.

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34 Ted Baker plc Annual Report and Accounts 2021

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We want to develop a healthy and prosperous working
climate and culture, one that is lived and breathed through
all of our commitments and actions every day.

THE TED BAKER TEAM

As in all businesses, Covid-19 has had an ongoing impact
on our people. Most of our retail teams in the UK and across
Europe were furloughed for the majority of the year. They have
also faced the uncertainty of a large number of redundancies
across our offices and stores, dealing with losing almost 1,000
of their friends and team members. At the same time, those
remaining have adapted to new structures and different ways
of working. Our office-based teams around the world have,
for the most part, been working remotely. This has made
collaborative working difficult, and building and maintaining
personal connections virtually has been challenging, adding
another layer of complexity.

Not surprisingly, team members are tired, but despite all this
the strength of the Ted Baker family and the commitment and
passion of our team members has shone through. This has
helped them deliver on some of our first milestones of Ted’s
Growth Formula, hitting all our Year 1 strategic targets. This is
very much down to the team’s resilience and determination to
help Ted Baker evolve and grow, and we owe them immense
gratitude for their hard work.

This fantastic attitude has allowed us to start getting the business
in shape for a brighter future. As part of Ted’s Growth Formula,
our ambition is to build a high-performing, capable, collaborative
and energised company for everyone who works for and with
Ted Baker. On a higher level, more and more people are
looking to work for purpose-driven companies with strong

shared values, often rooted in sustainability and community
giving. These cultural shifts in how we work, and what team
members expect, will continue to shape the workplace of the
future. As a result, we must be more sensitive than ever to how
our people feel, and focus on what is going to make Ted Baker
a competitive business. That way we can attract and retain
the best talent.

Clearly, the speed of change for team members is increasing
rapidly, with enormous shifts in the way people work having
an impact on every sector as a result of Covid-19. Aside from
the new ways of working needed to meet the immediate
demands of government restrictions and safe working practice,
Covid-19 has fast-tracked our focus on being more in tune with
a multi-generational workforce and understanding how their
needs differ. We have made considerable progress towards
our goal of becoming a high-performance organisation,
by changing our approach from a hierarchical and
unempowered structure, towards:

ɫ An empowered working style, based on trust

ɫ With truly flexible working

ɫ Constructively challenging the status quo

ɫ Through an inclusive, accountability-focused structure

ɫ Supported by transparent, open, three-way flow of

communication across the business.

With all the recent disruption and change, we’ve doubled our
efforts to innovate and inspire new ways of working, improving
processes and platforms to create a more positive experience
for team members. We’re working to build a business that
people are proud to be part of. A place where they feel their
true value can be unlocked; with a real sense of belonging
that lets them bring the unexpected to life and enjoy
a meaningful employee experience. A place that ultimately
captures the imaginations of our customers through our
products, service and ideas.

Gender breakdown

Ethnicity breakdown (UK)

1 1,506 (69.8%) Female
2 652 (30.2%) Male
Total 2,158

1 867 (74%) White British and white other
2 196 (17%) Black, Asian and minority ethnic
3 108 (9%) Not known
Total 1,171
We are developing our capabilities for capturing
this data globally.

Ted Baker plc Annual Report and Accounts 2021

STRATEGICREPORTd
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Over the last year, we have laid the foundations for this to
happen. It starts with a refreshed and clear purpose, mission
and values. There is a natural, authentic culture at Ted Baker,
centred around the kindness and commitment of our people.
This is tangible and unique to the brand – a golden thread that
connects everyone in the business, whether they’ve been with
us for two months or 20 years. And that’s very special.

A strong sense of ‘doing the right thing’ drives everything we do.
We know that Ted Baker is nothing without its people, and we
are focused on protecting and nurturing our greatest asset.

Developing our internal brand
Following the launch of our brand refresh in February 2021,
we have been working to evolve our internal brand. Our
brand purpose – to create and celebrate the unexpected in
the everyday – has informed all our thinking, as we considered
the values we should hold ourselves accountable to and the
sort of community we want to build at Ted Baker. As we reset
expectations of what kind of Company we wish to be, we aim
to create a culture that everyone is proud to be part of, one
we can all believe in and where we can all thrive.

Ted Baker’s culture is strong – you can see it in the shared ideas
and behaviours that make us who we are, as individuals and
as teams. Rather than impose a set of values from above, we
have taken inspiration from our people. We started by asking:
‘Who are we at Ted Baker?’. As a result, we’ve seen and
absorbed the ambition, commitment, passion, creativity,
energy and kindness we see in our people every day. We also
reviewed our current values and gathered feedback from many
sources, including from a global team member survey. All this fed
into our new set of Company values that come from within and
will be rolled out across the business globally from April 2021.

Persons with a disability
Our policy encourages applications from individuals of all
backgrounds and we are working to build on our inclusion
strategy. This covers training and development of all team
members, including those who have disabilities. We have
also introduced mental health first aiders to support the
wellbeing of our team members.

Our values

We are AUTHENTIC – We have the freedom to be
our best selves

We are CURIOUS – We are hungry to explore,
innovate and think differently

We are COURAGEOUS – We have the confidence
to be brave, have fun and discover the unexpected

We are INCLUSIVE – We embrace individuality and
celebrate difference

We are KIND – We try to do the right thing: for each
other, our communities, our planet and for Ted Baker

Our inclusion journey
At our town hall meetings, we have shared our desire to create
a working environment where diversity and inclusion are
elevated so that they become like oxygen – a vital force
which keeps Ted Baker alive. We have engaged a specialist
consultancy to support us as we build our inclusion strategy;
for clarity of language, this inclusion strategy will encompass
diversity (the different types of people that make up society
and without ANY hierarchy), inclusion (creating the culture,
conditions and opportunities for everyone to thrive) and
intersectionality (understanding the unique experiences of
people who hold two or more identity pillars). We believe
having a clear plan in place will serve our people well for years
to come. As a result, our existing policies on all areas of inclusivity,
including age and gender, will also be revisited and refreshed to
ensure they reflect the inclusion strategy described above.

We are a truly global organisation. We feel passionately that
our team should reflect the global nature of our customers.
We now have a presence in 50 countries with Ted Baker team
members in 17, including joint ventures in China and Australia.
Our team members represent more than 86 nationalities,
including 36 in our London head office alone.

Our Directors (at 30 January 2021) were 29% women/71% men.
Including senior management (the first layer of management
below Board level, including the Company Secretary), that shifts
slightly to 33% women/67% men. If you add their direct reports
(two layers below the Board) as well, we get closer to parity,
with 52% women/48% men.

Overview of gender diversity by region
As of 30 January 2021

North America

Europe

Asia

South Africa

Men Women

Total

Men Women

Total

Men Women

Total

Men Women

Total

Men Women

Total

Executive plc Directors

Non-Executive plc
Directors

Executive Directors +
Company Secretary

Senior management
(direct reports of the
Executive Directors)

Other team members

346

766 1,112 156

349 505

321 418

34 2,073

34 2,158

Total

374

797 1,171 160 353 513

36 Ted Baker plc Annual Report and Accounts 2021

Honey bees at our
London head office
In 2011, we learnt about
the plight of the honey bee.
Being a fan of the furry
pollinators, we teamed up
with Urban Beekeeping
to install two hives on the
roof of our London head
office. We have been
reaping the rewards ever
since, with successful
honey crops every year.

DEVELOPING OUR PEOPLE

The pandemic caused us to speed up adapting our processes,
particularly enabling remote working. This included updating
our on-boarding process – “Fresh Paint” – with a digital
on-boarding pack and remote working guidance to support
new team members.

In August 2020 we launched our global online Wellbeing
Hub, focused on health wealth and the inner self, and available
to everyone at Ted Baker. To make sure we connect with our
teams regularly, the Wellbeing Hub is updated weekly with
guidance and insights, including ‘Wellbeing Wednesday’
posts from our Chief People Officer, Peter Collyer. In addition,
60 volunteers from across the business have now trained in our
Mental Health First Aider programme.

Despite periods of uncertainty and furlough, six of our Retail
team members completed the ‘B-Ted’ learning programme.
This is based on a Foundation Degree in Retail Management,
in partnership with the Fashion Retail Academy. We are
delighted that four of them passed with distinction and we are
working with all of them to continue their professional and
personal development.

We are inspired by our team members who have built their
long-term careers at Ted Baker. Their commitment and investment
in the Company is amazing. We were excited to present 93
long-service awards to team members around the world who
have dedicated upwards of five years of service to Ted Baker.

We also welcomed 105 new joiners – 41 men and 64 women –
to the London office, across all departments.

Department

Male

Female

Total

Commercial & Business Development

Creative

Customer

Directors

Finance & Operations

IT & Business Solutions

People

Trading

Total

105

Ted Baker plc Annual Report and Accounts 2021

Our mean gender pay gap at 6 April 2019 was 18.9%, slightly
better than the previous year. The gap exists because, while
women are well represented at the very top of the organisation
and in our overall workforce, there’s much more to do to
develop and grow our own female senior leaders from within.
While Ted’s Gender Pay Gap compares well against other
high-end fashion retailers, we are working hard to improve this.
Our median pay gap has reduced from 1.3% to -1.1% and our
goal remains zero.

We are passionate about creating equality for all at Ted Baker
and doing the right thing by our people – no matter their gender,
race and ethnicity, nationality, sexual orientation, age, ability,
education, experience or personal circumstances.

We have made significant progress in a number of key
initiatives including:

ɫ Development and roll-out of a new career levelling
framework. We have looked at how we organise and
level different roles at Ted Baker to help us build a fair and
consistent reward framework. This means roles at the same
level in different disciplines are treated the same around the
world. There are six levels – Level 6: CEO and CFO. Level 5:
Executive Team. Levels 1-4: all other team members.

ɫ Review of family-friendly benefits. We want to

encourage parents to remain at Ted Baker for long and
fulfilling careers, alongside raising a family. From 1 March
2021, we’ve reduced the amount of time you need to have
worked at Ted Baker to receive enhanced maternity,
adoption and paternity pay, from three years to 26 weeks.
This offer is now very competitive in the market.

ɫ Introducing a new Flexible Working and Core Hours
Policy. We recognise the contribution of all our team
members and understand that at some time in their
working lives, they may want or need to work more flexibly.
We have introduced a new Flexible Working and Core
Hours Policy to help them work more efficiently while suiting
their needs. Over the last year, 11 people from head office
and six from EU retail have taken advantage of it.

STRATEGICREPORTe We’re committed to looking after everyone who creates,
makes and wears our products. Our supply chain affects
m
the lives of thousands of people around the world. So our
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approach must be proactive in promoting positive working
conditions and protecting human rights. We believe in
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working with like-minded partners who share our
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commitment to maintaining safe and fair labour practices
and minimising environmental impact. Working together,
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continuously improve in everything we do.
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When we bring on any new suppliers we ask them to adhere
to and implement our Code of Conduct. This is an integral part
of our on-boarding process and outlines what steps we expect
our suppliers to take to ensure their factory workers are being
treated fairly, in decent working conditions.

In addition, all our suppliers who make Ted Baker products
must conduct annual social audits of their factories and
processes, making sure continuous improvements are being
made, standards are up to scratch and things are ticking
over as they should. This falls under the responsibility of our
CommitTED and Production teams, who regularly visit
suppliers all over the world.

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We source finished goods from 160 factories in 19 countries
around the globe. Of over 40,000 workers in these direct
factories, almost 70% are women and over 7,000 are migrant
workers (either domestic or international). Our top sourcing
territories (by number of factories) are China, Turkey, India,
UK and Portugal.

In 2020 we focused on strengthening and building our ethical
foundations. All our sourcing partners and suppliers agree to
meet our five minimum ethical and sustainability requirements.

Ted Baker’s five minimum ethical and sustainability
requirements

1 Agree and adhere to Ted’s Ethical Code of Conduct,
Animal Welfare and Responsible Materials Policy,
and Vulnerable Workers Policy.

2 Provide a third-party ethical audit or certification every

12 months for production sites. Acceptable standards are:
SA8000, SMETA1, BSCI.

3 Address any non-compliances found in the audit

in a timely and open manner. Work on monitoring,
remediation or building capacity, as requested.2

4 Provide information or certification on sustainable

materials and environmental performance, as requested.

5 Be transparent with us3 and agree to factory disclosure

for publication.

1 SMETA audits can be either 2-pillar (labour and health and safety)

or 4-pillar (labour, health and safety, environment and business ethics).

2 All tanneries must complete a Tannery Profile Form and certain high risk

countries are subject to additional requirements.

3 Any subcontractors and/or homeworker information must be disclosed.

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Due to the pandemic and reorganisation of the business,
sadly we couldn’t run our graduate scheme – ‘Ted’s Extras’ –
in 2020, but we did relaunch our Apprenticeship Levy-funded
training via an online apprenticeship hub. In 2021, we will
continue to focus on this training, which is available to team
members at every level, as we develop our new strategy for
people early on in their careers.

With an eye on the future, we relaunched Ted’s Academy
Instagram. This is a key internal communications channel
to reach both head office and store-based team members
around the world. We also appointed new partners to
implement Cloud-based people technologies related to goal
setting and achievement (ClearReview), along with a learning
experience platform (Thrive) and employee engagement
(Peakon). This will allow us to build an infrastructure that offers
truly global access to education, training and communication
tools. News of this investment has been well received across
the Company.

In December 2020 we launched our corporate bonus scheme
for FY21 to everyone working at head office (in addition to
a separate scheme which exists for our Retail team members).
While we will not be paying a bonus this year, we launched the
scheme as part of a longer-term commitment to reward our
people as we build the business. The scheme gives all team
members a consistent bonus opportunity based on their career
level. It rewards them for their achievement of personal
objectives as well as on Ted Baker’s financial success.

While we won’t be paying out a bonus for FY21, we will
be providing pay increases to our lower paid team members
across head office and retail, and reviewing the decision
for other eligible team members over the summer, based
on Company performance once Covid-19 restrictions lift.

Following shareholder support at the 2020 Annual Meeting,
we launched two new share plans: Ted Baker Long-Term
Incentive Plan 2020 and Ted Baker Incentive Plan 2020.
Share awards were made to align the interests of shareholders
and the senior leaders of the business over the longer term,
and to recognise our leaders’ contribution to Ted Baker’s
transformation. The plans offer a three-year incentive,
available to people in career levels 4-6.

“ One of the most important
parts of a supply chain is
the people who work in it.
It is our responsibility to
protect the factory workers
who make our products.”

38 Ted Baker plc Annual Report and Accounts 2021

The pinnacle of this is signing Ted’s Ethical Code of Conduct,
which outlines our standards on working conditions, business
ethics, transparency, environmental stewardship, use of
chemicals and animal welfare (see below for further details).
Our Ethics and Sustainability Team, CommitTED, continues
to work closely with our Sourcing, Production and Buying
departments to make sure all potential new suppliers go
through our rigorous screening process. We see ethics and
sustainability as a partnership, where we can continuously
grow and improve towards better ways of working and more
responsible practices together.

Strengthening our responsible sourcing foundations
The CommitTED team brought in stricter standards to grade
third-party audits. This helps create continuity and
standardisation, which in turn makes our data more reliable
and easier to analyse.

To foster greater internal collaboration, our CommitTED
team runs regular training ethics and sustainability sessions,
produces monthly reports, shares tools and offers guidance.
It also continues to collaborate in reviews of existing supplier
progress to make sure ethics remains at the heart of our
business decisions. We have redeveloped the CommitTED
section of tedbaker.com with new, more engaging content
that makes it easier for customers and stakeholders to find out
more about our ethics and sustainability work. Over the past
12 months we have published our key policies to demonstrate
our commitments. These include:

ɫ Ted Baker’s Ethical Code of Conduct – this is the

cornerstone of our ethical values and sets out the minimum
standards for the safe, fair and decent work we demand
from our suppliers. It is based on international conventions
including The Ethical Trading Initiative Base Code and
The United Nations Universal Declaration of Human Rights
and the Acts. In 2020 we revised our Code to make sure
it remains effective as our business grows and reflects
changes in regulations, as well as strengthening standards
on health and safety and regular employment.

ɫ Vulnerable Workers Policy – we want to make sure all
workers are treated fairly, but we recognise some are at
greater risk of exploitation. This policy sets the standard
for protecting the most vulnerable people in our supply
chain, including migrant workers, homeworkers, children
and young people, as well as temporary, casual and
agency workers.

ɫ Third-Party Policy and Animal Welfare & Responsible

Materials Policy – the former outlines the minimum
requirements for third-party partners for ethical standards and
sustainable fibre sourcing. The latter underpins our commitment
to responsible sourcing and fair treatment of animals. It also
contains our full list of banned and restricted materials.

In 2020 we joined the Ethical Trade Initiative (ETI). This is
a workers’ rights forum which works with member companies,
trade unions and voluntary organisations to tackle the many
complex questions about what steps companies should take
to trade ethically, and how to make a positive difference to
workers’ lives. Their vision is of a world where all workers are
free from exploitation and discrimination, and enjoy conditions
of freedom, security and equity. We hope membership will
help strengthen our due diligence processes, build capacity
with our suppliers, help us understand our main ethical risks
and take action on spotlight issues.

Risk assessments and due diligence
The fashion industry’s supply chains are complex and come
with inherent problems. We face key issues in two of our largest
sourcing countries, and the use of multiple subcontractors in
our Turkish factories. To address these issues, we advise and
offer guidance to factories. We have also mapped the
subcontractors our factories use, and a third party ran an
ethical audit on our behalf for all sites that perform cutting,
stitching and finishing.

The CommitTED team has been aware of the increasing global
reports of forced labour embedded within the textile industry.
The CommitTED Team monitors all ongoing claims in our sourcing
countries which are seen as critically high risk. We have been
working very closely with our suppliers and third-party partners,
conducting a deep dive analysis of all manufacturing units and
a mapping exercise across each tier involved in the production
process, to ensure we are acting with utmost due diligence for
the protection of workers. In addition, we have sought advice
from the Ethical Trading Initiative and Anti-Slavery International
to understand how we can continue to ensure we are acting in
the most responsible way. Through our supply chain analysis,
we have not found any evidence of forced labour in our supply
chain. However, we will continue to monitor our factories and
mills closely, and collaborate with our trusted suppliers and
third-party partners to ensure we work to best practice. Should
we discover such practices, we shall take immediate action,
and communicate openly with our stakeholders.

Ted Baker plc Annual Report and Accounts 2021

STRATEGICREPORTd
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To produce goods that celebrate British manufacturing
heritage, we expanded our sourcing from UK factories in
2020. We have been mindful of the exploitative practices
found in garment manufacturing around Leicester and the
Midlands, so we have collaborated with multiple stakeholders
to make sure we are aware of any future issues and to improve
worker welfare. Ted Baker is committed to working with open
and collaborative suppliers in the UK. Our team has visited
all our current UK manufacturing facilities to ensure suppliers
understand our expectations. For very small UK factories,
a member of our CommitTED team has carried out an audit that
confirms our Code of Conduct is being followed. Where an
in-person audit has not been possible due to the pandemic,
we have run a number of virtual audits to keep our due
diligence up to date.

IMPACT OF COVID-19 ON OUR DUE DILIGENCE

Our normal due diligence process has been interrupted by
national lockdowns, business closures, travel and visitor
restrictions. This has slowed our annual ethical audit
programme, but 100% of our factories have had a third-party
ethical audit in the past two years. Other disruptions include
delays with training and documentation. For example, regular
first aid training has been put on hold by many organisations
and there are delays with documentation from government
bodies around inspections.

To understand these disruptions and mitigate any risks from
these delays we have been reviewing the situation on the
ground in our factories on a case-by-case basis. Some
factories have been offered a grace period between audits,
to allow an audit to be done safely without putting workers or
auditors at risk. We are continually working to understand the
changing landscape in the places where we use third-party
manufacturers through desktop research and consulting with
other brands and worker rights experts.

TRACEABILITY AND TRANSPARENCY

We have made good progress on transparency and
traceability. Our first-tier factory list is now updated every six
months and posted on our website. This shows exactly where
Ted Baker products are made. It also includes a map of where
our licensed products are sourced. This information is supplied
to the Open Apparel Registry (OAR) – a database of global
apparel factories, collating disparate factory lists into one
central, open-source map. It lists names, addresses and
affiliations, as well as assigning a unique OAR ID to each
facility. As a contributor to OAR, we are part of an industry-wide
shift to greater transparency about where our products are made.

The use of subcontractors is widespread in the apparel,
accessories and footwear industries. Ted Baker takes extra
care when reviewing subcontractors – use of unauthorised
subcontracting is a significant risk and subcontractors’ facilities
may not meet our ethical and sustainability requirements.
All subcontracted processes must ensure fair labour practices
and safe working conditions.

We made significant progress mapping and monitoring
subcontractor sites used by our direct factories in 2020.
We define a subcontractor site as any facility or domestic
premises (homeworkers) producing goods or undertaking
manufacturing processes outside the principal factory that
supplies Ted Baker directly. In the future, we hope to disclose
more information about subcontractors in our supply chain.
We are developing a subcontractor policy to create
a consistent standard and clear process to mitigate the risk
of unauthorised subcontracting. We also have a plan to map
further down our supply chain, to build a clear picture of the
suppliers who provide components, hardware, trims and fabric.

100%

of our factories have had
a third-party ethical audit
in the past two years

40 Ted Baker plc Annual Report and Accounts 2021

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s As a business, we play an active role in local communities in a number of ways. In previous years we have created education-focused
e
challenges, masterclasses, talks and presentations to local partners and schools. This year we had to adapt how we could continue to
stand shoulder-to-shoulder with our communities through the pandemic.

We started by launching our ‘stylish acts of kindness’ campaign to support the NHS. We donated clothes and our team members volunteered
their time to make it happen. We also set up ‘Ted’s Bazaar’, an online charity pop-up shop featuring exclusive limited-edition merchandise.
100% of profits went to local communities facing current and future challenges due to the pandemic.

Ted’s Bazaar

Magic
Breakfast

Akt

Blurt

Magic Breakfast is a charity that provides
underprivileged school children in London
with much-needed breakfasts before school.

In December 2014, we started to collect donations of leftover
restaurant food. With our head office restaurant closed for most of
2020, we kicked off our Ted’s Bazaar campaign with Magic Breakfast
being our first beneficiary charity. The first collection featured a rainbow,
an applause emoji, and the slogan ‘Home Hope Love’.

Akt supports LGBTQ+ young people in the UK
facing homelessness.

The second collection featured a Pride theme, with 100% of profits
going to Akt.

Blurt is a charity providing support for people
affected by depression.

The ‘One Day at a Time’ collection trained the spotlight on mental
health issues.

Creative
Mentor
Network

Creative Mentor Network is a charity striving
to make the creative network more inclusive for
those with low socio-economic backgrounds.

For the final collection, we set our sights on the creative minds of the
future, designed in collaboration with Rude Studio.

As well as Ted’s Bazaar, we continued to engage our communities through the imaginative use of unsold stock, along with repurposing
equipment and technology for community use. We’ve also aligned our commitment to sustainability with our work within the community.

Charity

Description

Donations

The Camera Amnesty –
Shutter Hub’s appeal

Shutter Hub is working to support Accumulate, an inspirational charity that
empowers homeless people through creativity. Their support includes
photography workshops, tutoring, portfolio reviews at The Photographers’
Gallery and their exceptional exhibitions at The Guardian HQ.

110 items of photography
equipment including tripods,
cases and lighting accessories
donated to The Camera Amnesty

Hands On London –
Wrap Up London appeal

NHS

Hands On London is a registered charity that runs the Wrap Up London
initiative, delivering unwanted coats to those in need (including the homeless,
elderly and refugees). Due to ongoing Covid-19 restrictions and the
subsequent changes in consumer behaviour, this year Ted Baker innovated
remote donations using the CollectPlus postal service. Between 5 and
12 November, customers and team members were given a QR code that
linked to a pre-paid CollectPlus label, so they could send their unwanted
coats directly to a Wrap Up collection point free of charge.

We supported the initiative of Universal Dry Cleaners in Camden to make
scrubs for the NHS, by donating fabric from one of our shirt factories in
Portugal. A team member from our production team helped to organise
the delivery. The scrubs were delivered to local clinics via the Covid-19
response units for Camden and Soho.

716 coats

Donation of fabric to make
scrubs for local medical centres

CAMDEN COUNCIL –
Learning Centre

This joint enterprise between Ted Baker, Camden schools and the council
brings teachers, headteachers and other education practitioners together
to share their expertise, drive improvement and achieve excellent practice.

8 office chairs to Camden
Learning Centre

CAMDEN COUNCIL –
Laptops for Schools
scheme

NW5

This initiative aims to help vulnerable students without computer access and
address the digital divide caused by the pandemic. It gives students access
to vital online learning while schools are closed. In many schools across
Camden, over half of pupils do not have access to a device to do essential
home learning and interact with their teachers.

NW5 is a small charity for children, young people and their families, based
in the heart of Kentish Town on the Peckwater Estate. They were not able to
get normal levels of funding due to the pandemic. The coats and warmers
we donated are used by core staff members while they are out in our local
community working with children and young people.

7 computers

8 coats and body warmers

Ted Baker plc Annual Report and Accounts 2021

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Ted Baker is working to develop a net zero carbon strategy.
Like all businesses and individuals, we have a responsibility
to reduce our environmental impact. As well as being
resource-intensive, our business has a global footprint.
Real change starts with how we use our resources – single-
use packaging, fast fashion and wastefulness have all left
their mark on the planet. Looking at more sustainable and
responsible alternatives to the materials in our collections is
one way we can address this, along with carefully managing
the materials we use for packaging and the energy we use.
To that end, we already use 100% renewable energy in our
UK stores and Ugly Brown Building.

RESPONSIBLE MATERIALS

Safeguarding the planet is a big responsibility for any business
and at Ted Baker we take it very seriously. Our biggest
environmental impact is found in fibre selection. Some of our
most-used materials include cotton, wool, polyester, leather
and regenerated cellulosics – the technical name for fibres like
viscose and lyocell. We’ve committed to switch to 100% more
sustainable materials in all our collections by 2030. We are on
track to achieve our medium-term sustainability objectives while
we develop our long-term vision. We launched our targets
in 2019, and we are already seeing an improvement, with
17% of our current collections made with sustainable materials.

Overarching target

FY20
% sustainable

FY21
% sustainable

100% more sustainable materials in
all our collections by 2030

12%

17%

We’ve set specific interim targets for the next few years,
outlined in the table below. As the industry evolves, we will
continue to review these targets to make sure they are as
ambitious as possible.

Material

Cotton

Leather

Man-made
cellulosic
fibres

Interim target

100% of our cotton is
organic, recycled or BCI1
cotton by 2024.

100% of our leather
to come from LWG
or equivalent certified
tanneries by 2025.

100% of our regenerated
cellulosics will come from
FSC2 or PEFC3 certified
forests, with a further 50%
produced through
sustainable production
methods by 2025.

FY20
% sustainable

FY21
% sustainable

51%

69%

25%

26%

14%

16%

1 Better Cotton Initiative.

2 Forest Stewardship Council.

3 Programme for the Endorsement of Forest Certification.

All our sustainability claims are backed up with industry best
practice certification – currently the only way to prove
something is truly more sustainable.

Leather
The Leather Working Group (LWG) standard is the leather
industry’s most acknowledged environmental standard.
We joined the LWG in 2020 to aid mapping of every tannery
in the world. It’s a multi-stakeholder initiative involving brands,
suppliers, manufacturers and NGOs around the world.
Their audit protocol assesses the environmental compliance
and performance capabilities of tanners, giving LWG the
information it needs to promote sustainable environmental
business practices in the leather industry. Twenty-six percent
of our leather now comes from LWG-certified tanneries,
putting us on track to meet our 100% target by 2025.

42 Ted Baker plc Annual Report and Accounts 2021

Wood-based products
At Ted Baker we rely heavily on wood-based products – from
paper-based packaging and shipping cartons to fabrics like
viscose and lyocell. In 2020, we partnered with not-for-profit
organisation Canopy and committed to two important policies,
Pack4Good and CanopyStyle. These commitments underline
our ambition to help protect the world’s forests through a more
responsible approach to the procurement of pulp, paper,
packaging and fabrics. Pack4Good supports our ongoing
efforts to use innovative solutions to reduce our packaging
footprint. It also helps ensure the paper products we do use
don’t have an adverse impact on the world’s ancient and
endangered forests.

Our new Paper and Packaging Policy sits alongside new UK
tax legislation that discourages the importation of virgin plastic
into the UK. This policy is designed to reduce our packaging
footprint, ensure the paper products we use do not damage
the world’s forests, and cut down on single-use plastic
packaging. Our policy targets are:

ɫ Eliminate sourcing from endangered species’ habitats,

and ancient and endangered forests, by 2022

ɫ Eliminate sourcing from controversial suppliers

(e.g. illegal logging or areas reserved for
indigenous peoples)

ɫ Use only FSC certified paper and packaging for all

branded and unbranded products

ɫ Preference for paper/packaging with high-recycled

content, reaching an overall recycled fibre content in our
papers/packaging of at least 50% average by 2024

ɫ All polythene bags must contain a minimum of 50%
post-consumer recycled content (from April 2022)

ɫ All polythene bags must contain 100% post-consumer

recycled content by 2025

ɫ All plastic transit hangers need to be made from

a minimum of 50% post-consumer recycled plastic
by 2022.

To ensure that these commitments are achievable, we have
engaged with and trained our suppliers on the importance
of authentication of any claims and processes for obtaining
correct certification.

Recycled swimwear materials
In 2020, 27 styles in our swimwear ranges were created from
Econyl, made from a combination of reclaimed fishing nets and
recycled fabric scraps.

‘Conscious Shop’
We continue to work hard to create more styles from
responsibly sourced materials. In the meantime, to make
shopping for a more sustainable wardrobe easier, we created
the Ted Baker ‘Conscious Shop’. Pieces featured here are all
made from more than 50% responsibly sourced materials
(meaning they use less water, energy or chemicals in the
production process). This includes items made from eco-friendly
materials like recycled polyester and organic cotton.

Animal Welfare & Responsible Materials Policy
Ted Baker is committed to promoting the humane and
responsible treatment of animals, based on the internationally
recognised ‘Five Freedoms and Provisions of Animal Welfare’.
Our new Animal Welfare & Responsible Materials Policy
outlines our commitment to responsible sourcing and fair
treatment of animals. This sets a standard for our suppliers to
meet. The policy details our banned and restricted materials –
including alpaca, which we have recently removed from our
collections due to documented concerns over animal cruelty.
The policy also contains specifications for raw materials,
to make sure that social and environmental impacts are taken
into account in our sourcing process. We continuously review
innovative materials and more responsible sourcing options
as they become available.

6 7

Ted Baker’s
total carbon impact

1 54% 119k tCO2e Raw materials & processing
2 16% 36k tCO2e Manufacturing
3 9% 20k tCO2e Other spend
4 11% 25k tCO2e Use of sold products
5 1% 0.9k tCO2e End-of-life treatment of sold products
6 0% 0.6k tCO2e Scope 1
7 2%
4k tCO2e Scope 2
8 7% 15k tCO2e Scope 3

“ Fabric selection and the
way we use materials has
a huge role to play. We
must constantly innovate
and make responsible
choices that keep us
on the path towards
continuous improvement.”

Ted Baker plc Annual Report and Accounts 2021

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A CLIMATE STRATEGY FOR NET ZERO

Reducing our carbon and waste footprints is an obvious
and pressing challenge. Working with experts at Carbon
Intelligence, we’ve been developing our climate strategy,
focusing on areas we have direct influence over. Ninety-eight
percent of our carbon footprint comes from our Scope 3 value
chain operations. This is a huge challenge in the industry, and
one we are already starting to tackle. We are in the process
of setting ambitious targets to work closely with our suppliers
in making significant changes that will drastically reduce our
carbon impact.

The strategy will define science-based targets and ensure we
have the right practices and processes in place to reduce our
carbon footprint. We plan to integrate our carbon strategy
across all business areas at Ted Baker, aiming to launch in 2021.

Thirty per cent of our Scope 1 & 2 carbon emissions come
from the operating and running of our stores, head office,
warehouses and transport. We realise this is a significant
percentage, so we’re working to reduce our impact in these
areas. A key part of any climate strategy is data, so we’re
ramping up efforts to collect more accurate data from all
sources. Once collated, we’ll set about making what we
do even more efficient.

44 Ted Baker plc Annual Report and Accounts 2021

100%

ofenergyusedinheadoffice
and UK sites is renewable

In addition, to aid our push towards net zero carbon emissions,
we have signed up to the British Retail Consortium (BRC)
Climate Action Road Map. This aims to decarbonise the retail
sector by 2040. We look forward to collaborating with other
brands in making a collective push towards achieving this goal.
Since 2010, we’ve been reporting to the Carbon Disclosure
Project (CDP) to help us focus on areas of carbon risk within
our business. This not-for-profit organisation runs a carbon
disclosure system for companies (and even cities) to help
manage their environmental impacts. They issue two grades –
one for Climate Change (we achieved a B- in 2020), and
one for Supplier Engagement (we achieved a B in 2020).

Circularity
Ted Baker is proud to be a founding signatory of the WRAP
Textile 2030 initiative, which is pioneering circularity in the UK.
The ten-year programme aims to transform UK clothing and
home fabrics to reduce their impact on climate change.
The aim is to cut lifecycle Greenhouse Gas (GHG) emissions
in line with the global goal of a 1.5°C trajectory; shrink the
water footprint of products; and inspire more circular business
models for garment and home textiles.

Excess products and fabric
We combat product waste in many ways. To avoid contributing
to the huge quantity of textiles that end up in landfill in the
UK, we donate our end-of-life stock to reputable charities.
In previous years we have worked with our key charity partners,
Oxfam and Age UK, along with New Life, (a charity based
in Cannock that helps children with disabilities and terminal
illness – https://newlifecharity.co.uk). All three charities sell our
stock in their UK stores to raise money for their important work.

With the retail shutdown through the pandemic, we managed
our stock levels slightly differently this year. All unsold and
damaged stock donations are on hold while our charity
partners recover from store closures. As a result, we have
contributed only faulty or damaged stock to one charity
partner, New Life, who sell these products as second-hand.
This year we diverted 21 tonnes of terminal stock to New Life
rather than sending it to landfill.

In 2020 we also partnered with Reskinned, an organisation
which aims to maximise the life of clothing and footwear
by creating a circular economy model to help fashion
brands achieve their sustainability goals. With their help
we repurposed 15 tonnes of unused fabric.

In conclusion
We have a responsibility to reduce the environmental impact
of our operations. As well as being resource intensive, the
nature of our business causes quite an impact on our global
footprint. From the raw materials we source, to our transport
and logistics used to ship products, we are looking at the
impact which our entire operations have on the planet.
This means change begins with how we use our resources.

FY21 ANNUAL REPORT ENERGY & CARBON
STATEMENT

This statement has been prepared in accordance with
our regulatory obligation to report greenhouse gas (GHG)
emissions pursuant to the Companies (Directors’ Report)
and Limited Liability Partnerships (Energy and Carbon Report)
Regulations 2018, which implement the government’s policy
on Streamlined Energy and Carbon Reporting.

During the reporting period 1 February 2020 to 31 January
2021, our measured Scope 1 and 2 emissions (location-
based) totalled 2,283 tCO2e. This comprised:

Scope

FY20

Total

369

2 – Location-based

3,553

FY21

UK Rest of the World

Total

141

797

120

261

1,225

2,022

2 – Market-based

3,553

1,328

Total Scope 1 & 2
(location-based)

Total Scope 1 & 2
(market-based)

Scope 1 & 2
intensity per sq ft –
market-based

3,921

938

1,345

2,283

3,921

141

1,448

1,589

0.009

0.001

0.070

0.071

Scope 3

N/A

2,600

Overall, our Scope 1 and 2 emissions (market-based) have
decreased by 42% in the year. This was due to our switch to
100% renewable electricity at all our UK sites and the impact
of Covid-19 decreasing worldwide energy consumption.

This year, we have expanded our reporting boundary
to include Scope 3 emissions for fuel and energy-related
activities. Our measured Scope 3 emissions totalled
2,600 tCO2e.

During the year, our total fuel and electricity consumption
totalled 7,460 MWh. The split between fuel and electricity
consumption is displayed below.

Energy
consumption (kWh)

FY2020

Total

FY2021

UK Rest of the world

Total

Electricity

Fuels1

1 Natural gas.

11,410

3,495

3,151

6,646

1,728

766

814

“ We have a responsibility to
reduce the environmental
impact of our operations.
It is our duty to ensure we
make positive changes
to reduce our footprint.”

42% Reduction in total

Scope 1 & 2 emissions

Methodology
We quantify and report our organisational GHG emissions
in alignment with the World Resources Institute’s Greenhouse
Gas Protocol Corporate Accounting and Reporting Standard,
and in alignment with the Scope 2 guidance. We consolidate
our organisational boundary according to the operational
control approach, which includes all Ted Baker sites.
All concession/JV sites are reported under Scope 3.
The GHG sources that constituted our operational boundary
for the year are:

ɫ Scope 1: Natural gas, owned/leased vehicle

mileage, refrigerants

ɫ Scope 2: Location- and market-based

electricity consumption

ɫ Scope 3: Business travel, fuel and energy-related activities

(FERA), electricity from concession/JV sites.

In some cases, where data is missing, values have been
estimated using either extrapolation of available data or data
from the previous year as a proxy.

The Scope 2 Guidance requires that we quantify and report
Scope 2 emissions according to two different methodologies
(“dual reporting”): (i) the location-based method, using
average emissions factors for the country in which the reported
operations take place; and (ii) the market-based method, which
uses the actual emissions factors of the energy procured.

Ted Baker plc Annual Report and Accounts 2021

STRATEGICREPORTe We’ve aligned our programmes and policies around the World Economic Forum’s
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environmental, social and governance (ESG) framework, based on three pillars:
people, prosperity and planet. These tables outline a working plan and how we’ll
deliver against it over the next 12-18 months.

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Mapping our targets against the World Economic Forum framework

PEOPLE & PROSPERITY

An ambition to end poverty and hunger, in all their forms and dimensions, and to ensure that all human beings can fulfil their
potential in dignity and equality and in a healthy environment.

An ambition to ensure that all human beings can enjoy prosperous and fulfilling lives and that economic, social and technological
progress occurs in harmony with nature.

Focus

Ted Baker key initiatives

2019

2020

Dignity + equality

Implement Diversity +
Inclusion programme

Not previously
reported on

Launching spring 2021

Skills for the future Launch of Ted’s Learning

New for Ted Baker

Launching spring 2021

Experience Platform

Skills for the future Develop current and

New for Ted Baker

future leaders

Developing Ted Baker’s
management approach

Developing Leadership Development
initiatives

Our stated targets

Strengthen Diversity +
Inclusion within Ted Baker

Centralised training
programme for all
Ted Baker’s teams

All managers trained
by mid-2022

Leadership Development
programme in place H2
2021

Skills for the future Provide visibility and

New for Ted Baker

Rolled out our career levelling
framework across the entire business,
consisting of six levels

Increased transparency
of career levelling
across business

Published factory list
October 2019

Published September 2020

Publish key ethical policies
2020

opportunity for growth within
Ted Baker

Redevelopment and
publication of Code of
Conduct, Animal Welfare,
Vulnerable worker +
Third-Party policy

Membership of Ethical
Trading Initiative*

Not part of any ethics
initiative

Joined Ethical Trade Initiative
November 2020

Strengthen foundations for
ethical programme

Join the Open Apparel
Registry

Greater transparency
of supply chain for
stakeholders – Factory list
2020 to include Licensee
production countries

Not published

Published October 2020

Publish factory map 2020

Published factory list
October 2019

Published factory list and map
October 2020

Publish factory list 2020

People in the
supply chain

Community +
charity

Develop mapping tools and
communication for suppliers

Continued community
engagement

Investment in
wellbeing

Greater investment in
mental health

New for Ted Baker Map 100% subcontracting units used

for Ted Baker production

Greater traceability within
supply chain

Supported
five community
projects

New for Ted Baker

Supported seven community projects
through donations

Strengthen Ted Baker’s
community engagement

launched a global online Wellbeing
Hub – focused on health, wealth
and inner self

Redevelopment of
wellbeing programme

Investment in skills Drive high levels of

New for Ted Baker

employee engagement

Preparing partnership with Peakon
for June 2021

Investment in skills

Investment in the growth of
our collective skills

Not published

Six of our Retail team members
completed their ‘B-Ted’ learning
programme – based on a Foundation
Degree in Retail Management,
in partnership with the
Fashion Retail Academy

Relaunched our apprenticeship-levy-
funded training via a dedicated
online apprenticeship hub

Increasing engagement
scores every quarter,
every year

Increased investment
in our teams

46 Ted Baker plc Annual Report and Accounts 2021

Commercial
sustainability

Community +
Charity

Investment in
people

PLANET

Focus

Climate

Innovation

Traceability

Mapping our targets against the World Economic Forum framework continued

Focus

Ted Baker key initiatives

2019

2020

Our stated targets

New for Ted Baker

Launched ‘Conscious Shop’ featuring
sustainable pieces

Increase sustainable
options on website

More sustainable options
available to customers

More visibility of
sustainability programme
for customers

Ted Baker’s Bazaar range
launched, with all proceeds
going to charities

New for Ted Baker

Refreshed website

New for Ted Baker

Donated sales of £35,800 across
four charity partners through the
pandemic

Donation of coats for
Wrap Up London

316 coats donated

716 coats donated

Investment options available
to team members

Not published

Launched two new share plans,
Ted Baker Long-Term Incentive
Plan 2020 and Ted Baker
Incentive Plan 2020

Increased visibility
of sustainability
programme to customers

100% of proceeds
of Ted’s Bazaar lines
donated to charity
during the pandemic

Facilitate coat donations
for Wrap Up London

Wider incentive options
available to team
members

An ambition to protect the planet from degradation, including through sustainable consumption and production, sustainably
managing its natural resources and taking urgent action on climate change, so that it can support the needs of the present and
future generations.

Ted Baker key initiatives

2019

2020

38 tonnes diverted

21 tonnes diverted

Our stated targets

Zero textiles to landfill

Donation of unsold +
damaged stock to charity

Development of carbon
strategy

No climate strategy

Joined BRC Climate Action Road
Map

Set science-based targets
and carbon strategy FY21

No climate strategy

Joined WRAP Textiles 2030 initiative

Set science-based targets
and carbon strategy FY21

Switching to renewable
energy

Non-renewable
energy only

100% renewable energy in UK stores
and our head office, UBB

Reduce greenhouse
gas emissions

Uptake of sustainable fibres
in collections**

12% total materials
more sustainable

Uptake of Better Cotton
Initiative cotton in products

52% cotton from
sustainable sources

17% total materials more sustainable

69% cotton from sustainable sources

Switching viscose to
sustainable alternatives**

14% from more
sustainable sources

16% from more sustainable sources

100% sustainable
materials by 2030

100% cotton from
sustainable sources
by 2024

100% regenerated
cellulosic from sustainable
sources by 2025

Guidance provided for
production teams

New for Ted Baker

Developed preferred supplier list +
Sustainable Fibre Standard

100% sustainable
materials by 2030

Joined Leather Working
Group, mapping of finishing
tanneries

26% all leather
products from LWG
tanneries

27% all leather products from
LWG tanneries

100% leather from
Leather Working Group
certified tanneries
by 2025

*ETI – Ethical Trading Inititave – worker rights membership.

**Data produced annually (January 2021).

Ted Baker plc Annual Report and Accounts 2021

STRATEGICREPORTt Revitalising our approach to risk
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Risk management is a key part of Ted Baker’s business strategy and success.
As with any business, we face inherent risks, and we keep these under constant
review. At the same time, we consider potential new risks and actions we can
take to reduce or where possible eliminate them. Of course, risk management
is not an exact science; it is designed to manage the risk of failure to reach our
business objectives. Not surprisingly, in a year that has seen heightened risks
ranging from Covid-19 to the recapitalisation of the balance sheet and the
stock inventory review, risk has been high on our agenda.

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“ A key focus in the year
for the Board and the
newly constituted Audit
& Risk Committee has
been a revitalised
approach to risk and
internal controls.”

As a result, we have reviewed our approach to risk through
the year. Important actions included the refresh of the
management Risk Committee and developing our Group-wide
programme to risk, which lets us identify, analyse and assess
risks and then manage, control and monitor them. The Board
and the Audit & Risk Committee work together with the
management Risk Committee to deal with different aspects
of the process. Our ongoing process for identifying, evaluating
and managing the significant and emerging risks faced by the
Group has been in place throughout the year.

The tables that follow outline the key risks we have identified,
their trends, potential impact on the business and how we
manage them together with the primary emerging risks.

plc Board
Ultimately responsible for risk management

Audit & Risk Committee
(i) Monitors the effectiveness of the system of
risk management and internal controls; and
(ii) Reviews and challenges key risks, associated

controls and management action plans

Executive Board
Oversees the Group’s risk management
processes and monitors mitigating actions

Risk framework
Ensures consistent approach across the Group

Wider business

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Board

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Our risk oversight is designed to give a clear picture of risk from
every angle, from Group to operational levels.

The Board is ultimately responsible for our
approach to risk management and internal
controls. It is also responsible for reviewing
the effectiveness of our management and
controls and setting the Group’s appetite
for risk. This is done on a regular basis,
helping us to identify emerging risk and
assess the status of existing risk. Risk
management will continue to be a key
focus for the Board next year.

The Audit & Risk Committee is responsible
for overseeing and reviewing the
effectiveness of the Group’s internal control
and risk management systems. It reports its
findings to the Board regularly through the
year and also assesses the findings and
recommendations of the Management Risk
Committee and the Group’s external and
internal audit processes, then looks critically
at how the business responds.

Executive Team The Executive Team is responsible for the
identification and evaluation of significant
risks applicable to their areas of the
business, along with the design and
operation of suitable internal controls.
These risks are assessed on an ongoing
basis through the year and may be
associated with a variety of internal
or external sources.

Management
Risk Committee

The management Risk Committee was
re-established last year. It reviews risk
management and control process for each
of our key business areas. Its members
include relevant people from the Executive
Team and heads of department. This is
designed to give more people ownership
of risk across the business and to keep risk
front of mind on a day-to-day basis.

OUR WORK THIS YEAR

A key focus for the Board and the Audit & Risk Committee
has been on reinvigorating Ted Baker’s approach to risk and
internal controls. As reported on page 73, we commissioned
Deloitte to help us create a phased project to review and
make recommendations to strengthen our existing internal
controls framework.

The first phase of the project looked at key business cycles:
revenue, purchase to pay, inventory and record to report, which
have a greater inherent risk. An assessment of these business
cycles identified a number of areas that needed improvement.
The second phase assessed general IT controls, along with
payroll, treasury and financial instruments, fixed assets, tax
management and budgeting and forecasting.

This was followed by a programme to review our operating
effectiveness. You will find more detail about this in the Audit &
Risk Committee Report on pages 72-75.

During the year the Audit & Risk Committee worked with the
Executive Team on an extensive review of the business strategy,
including the risk management and controls process in each
key business area, then supported management to drive
improvements across the business. The aim of these reviews

is to uncover and avoid problems in the future by investigating
material issues and putting new actions in place or supplementing
existing actions. This review covered all material controls,
including financial, operational and compliance controls.

The Committee also considered the work done by the
management team to finalise the year end accounts including
key measures taken such as to consider our controls, systems,
processes and risk management systems in relation to the
financial reporting process and the way we have been
audited. The Audit & Risk Committee is satisfied that the
accounts and the results have been subject to stringent review,
test and examination.

The Executive Team reviews risk through the lens of the Group’s
strategic transformation and financial plan (Ted’s Growth
Formula). They focus on potential control breakdowns, disruption
in information systems, competition, natural catastrophes and
regulatory requirements. The Chief Financial Officer considered
the key risks inherent in the business and the system of controls
necessary to manage these risks. He presented his findings to
the Audit & Risk Committee and the Board on a regular basis
through the year, including recommendations and reviews
from the Management Risk Committee.

The Chief Executive Officer reported regularly to the Board
on changes in the business and the external environment that
affected significant risks. The Executive Team also shares the
monthly financial information with the Board, which includes
updates about the Group’s progress in achieving its goals,
against our key performance indicators and risk assessment.

The management Risk Committee, whose members include the
Chair of the Audit & Risk Committee and the Chief Financial
Officer, worked with the Executive Team on the extensive
review of risk management and control process across the
business, outlined above. It also supported management
to implement the improvements this review identified.

The Group is resuming and increasing focus on the internal
audit area and changing from outsourcing the function to
bringing it in-house. The business is now recruiting the Head of
Internal Audit role and will rebuild the internal audit resourcing.
This will also include working to refresh and update our anti-
bribery and corruption policies. Whilst the Group has policies in
relation to the supplier code of conduct, including environmental
matters, and with regard to Group team members‘ conduct,
it does not have explicit policies pulling together all areas of
anti-bribery and corruption. This will be a priority for the year
ahead. The Audit & Risk Committee is responsible for monitoring
and reviewing the effectiveness of internal audit activities.

This year, the Audit & Risk Committee reviewed and adopted
revised terms of reference which can be found on the Company
website www.tedbakerplc.com. The revised terms cover:

ɫ The authority, resources and co-ordination of those involved

in the identification, assessment and management of
significant risks faced by the Group

ɫ The response to the significant risks which have been

identified by management and others

ɫ The maintenance of a controlled environment directed

towards the proper management of risk

ɫ The ability to raise awareness of potential emerging risks

and their assessment

ɫ The annual reporting procedures.

Ted Baker plc Annual Report and Accounts 2021

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Clarity and focus are the keys to successful risk management. In a year
of unexpected and rapid changes, this has helped us stay ahead,
identifying and managing risks as they appear. The tables below outline
the key risks we have identified, their trends, potential impact on the business
and how we manage them, together with what we believe are the primary
emerging risks.

Risk category/Issue

Potential issue

Mitigation

Change in level of risk

MARKET RISKS

Covid-19

The longevity of the pandemic could lead to
further lockdown store closures, team members
on furlough and the need to discount. This could
lead to more redundancies and store closures in
the longer term.

While some sales may migrate to the
Company’s eCommerce operations, it is
unlikely that sales through this distribution
channel will fully replace revenue lost
to store and concession closures.
We will need to explore all UK
government support schemes and take
steps to reduce costs and protect cash
flow. This will include suspending all
non-essential capital expenditure,
stopping discretionary operating
expenses, furloughing team members
and restricting travel.

ECONOMIC
DOWNTURN

COMPETITION

CHANGING
CUSTOMER
PREFERENCES

Due to a slowdown in the economy, there is
a decrease in demand for Ted Baker’s products.
For example, people have less disposable income
to spend on non-essential items. This could lead
to the need to discount and reduce margin or hold
excess stock, ultimately affecting the bottom line
and business profitability/viability, as well as
damaging the Ted Baker brand.

We carefully manage costs and
regularly update the Board on
performance. We work to ensure
our fixed costs are managed well.
And we make sure we are ‘no ordinary
brand’, with product that reflects this
differentiated positioning and continues
to attract customers.

A lack of insight around customers and competitors
could result in Ted Baker being overtaken by the
competition, particularly if our market position isn’t
clear. This could reduce our market share and
supply chain buying power if we are not seen as
competitive with other brands or we fail to offer
a competitive and suitably diverse product mix.

We fail to understand and respond to changes in
customer preferences. For example, lack of stock
diversity or preferred shopping channel, or lack of
influencer recommendation, results in Ted Baker
losing its competitive edge. This could lead to a
loss of sales, reduced margins, missed opportunities
for growth or a poor balance of sales channels.

We regularly review performance,
product, price and our competitors
to make sure we are best placed to
succeed in a competitive market. We
continue to invest in our online business,
including the appointment of a Chief
Customer Officer, Jennifer Roebuck,
to steer this activity.

We maintain a high level of market
awareness and an understanding of
consumer trends and fashion so we
can respond to changes in consumer
preference. We use customer data
to develop targeted marketing and
promotional activity. We continue to
focus on product design, quality and
attention to detail.

Increased,
as pandemic
impact spread
globally

Increased,
as a result of the
global pandemic

50 Ted Baker plc Annual Report and Accounts 2021

Risk category/Issue

Potential issue

Mitigation

Change in level of risk

MARKET RISKS

EXECUTION OF
TRANSFORMATION
STRATEGY

Failing to deliver our corporate transformation
strategy could result in Ted Baker not realising
the long-term goals of the business. This could be
a result of:

ɫ The wrong transformation strategy being rolled

out to the business (or failing to pivot that
strategy if the operating environment changes).

ɫ A lack of bandwidth – starting on too many

activities without sufficient resource, an inability
to focus on future value due to short-term
firefighting, an inability to retain and recruit the
right talent, confusion around responsibility for
individual workstreams, misaligned prioritisation
or competing priorities. For example, failing
to align our finance strategy with the wider
business strategy, inability to deliver strategy
due to budget constraints.

Unable to respond to market changes around
real estate – meaning we cannot negotiate new
contracts that support a profitable store opening
and/or exit old contracts that are no longer
commercially viable. Inability to structure leases in
a flexible way could limit our ability to operate on
the high street or being tied to long and potentiality
expensive leases.

REAL ESTATE
AGILITY

The Group’s Directors and Executive
Team have set up regular reviews
to monitor and assess the ongoing
progress of the new transformation
strategy with detailed execution plans.
These plans are designed to successfully
deliver the new strategy while reducing
any new risk.

No change

We have launched a comprehensive
programme of landlord renegotiations
internationally to ensure that existing
and new contracts are both flexible and
commercially viable.

Increased as a
result of the global
pandemic

MARGIN
DELIVERABILITY/
FOREIGN
EXCHANGE

Factors such as foreign exchange movements,
an inability to pass on increased costs to customers
and produce goods for less could mean the
Company fails to meet our goal to improve margin.

We maintain a regular and rigorous
forecasting cycle that enables early
action to hedge foreign exchange risk
and manage cost variations.

No change

Risk category/Issue

Potential issue

Mitigation

Change in level of risk

REPUTATIONAL RISKS

BRAND
REPUTATION/
IDENTITY CRISIS

A revitalised product mix with a new composition
of product categories, combined with a change
in focus on target audience could send mixed
messages to consumers, resulting in a loss of core
loyal customers and failure to engage new
customers and influencers.

CORPORATE
REPUTATION

Exposure of stakeholders to negative media
stories could lead to reputational damage affecting
the ability to attract and retain investors, customers
and team members.

Our dedicated team focuses on
reputational matters relating to
Ted Baker. The team is made up of
internal stakeholders and external
consultants. We deal with reputational
issues swiftly and in a considered way.
We carefully consider each new partner
we do business with. And all partners are
subject to due diligence and monitored
on an ongoing basis to make sure they
remain appropriate for the brand.

We have clear governance and people
policies that seek to prevent reputational
issues arising.

Increased as we
implement the
transformation
strategy

No change

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Risk category/Issue

Potential issue

Mitigation

Change in level of risk

SUPPLY AND VALUE CHAIN RISKS

SUPPLIER RISK

CRITICAL PATH/
AGILITY

CONTROL
ENVIRONMENT

MERCHANDISING/
STOCK
OBSOLESCENCE

IT RESILIENCE AND
CONTINUITY

A failure to evaluate suppliers, set up suitable
commercial contracts, or establish supplier
management protocols (including ongoing
monitoring), could leave Ted Baker exposed
to supplier failure, an inability to source goods
or significant margin pressure.

Without creating a more agile approach to
the critical path and enhancing speed to
market we won’t be able to take advantage
of opportunities in the market as they arise
and would lose out to competitors who can
respond faster.

Insufficient or inadequate checks, controls and
processes could result in limited financial
oversight, leading to errors, misstatement or
fraud. A weak control environment could lead
to poor business decisions or decisions made
by team members who do not have adequate
insight or authority such as changing supplier or
customer payment terms, oversight over stock
quantities and stock buy. A weak control
environment could also lead to an impaired
ability to forecast revenues and profits and
inaccurate accounting.

Inventory risk due to stock obsolescence could
lead to a write-off that damages profitability
and asset value.This could be a result of
inaccurate forecasting, lack of relevance to
customers, high price points or poor inventory
controls, and poor management of revenue
data to drive decision-making.

A lack of resiliency or business continuity plans
could result in a failure to withstand any shocks
and an inability to adapt during a crisis. For
example, failure to take more sales online while
shops are forced to close, inability to adapt
effectively and communicate action required
during a crisis.

We have reduced the number of suppliers
globally, concentrating on our strongest
partnerships.

Reduced

We continue to review the length of
our critical path to maximise our
responsiveness and agility.

We maintain flexibility in buying through
creating room for ‘open to buy’ in portions
of stock planning and ‘speed to market’
in areas of product design.

Increased,
as a result of the
global pandemic

We are executing a broad controls
remediation programme with the support
of a specialist team from Deloitte. This
programme ensures continuous review
of controls as well as progressive
improvements.

No change

We maintain a regular and rigorous
forecasting cycle that enables appropriate
stock ordering, as well as early action
to recognise and monetise elevated
stock levels.

We have a steering committee to review
major IT projects and an infrastructure
of senior team members across IT, legal
and procurement along with external
professional advisers. We have introduced
a new security manager role and adopted
new security measures during the year.
In addition, the Group has a clear and
robust approach to change management
with project managers to overseas major
projects with the key business stakeholders.

Risk category/Issue

Potential issue

Mitigation

Change in level of risk

PEOPLE RISKS

TALENT
MANAGEMENT

Failing to attract and retain the best talent could
mean we cannot achieve our strategic goals
through a lack of the innovation, objectivity and
diversity we need to support customer and
market needs.

We may not meet our business objectives if we
fail to retain and train existing team members so
their skill sets evolve to meet the needs of the
business. Failing to attract new team members
with the right capabilities and ensuring market
competitiveness (through competitive salary,
benefits and flexible working) could also
undermine our ability to complete our
transformation strategy.

Identification and retention of key talent
is vital and we take active steps to keep
the team stable and secure. An annual
benchmarking review ensures we offer
competitive remuneration and total reward
packages. We also utilise long-term
incentive schemes to retain key talent.

Employee engagement through our
culture and environment strengthens the
commitment of team members and has
a positive impact on our retention rate.

Succession plans are in place and have
been reviewed during the period.

The Group has put policies and procedures
in place to detect and deal with people
matters. This includes robust reporting
channels through an independent helpline.

No change

52 Ted Baker plc Annual Report and Accounts 2021

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Risk category/Issue

Potential issue

Mitigation

Change in level of risk

DIVERSITY AND
INCLUSION

Without a sufficient focus on inclusion across all
levels of the business there is a risk that team
members will become demotivated which could
damage performance and reputation.

The business has engaged a specialist
consultancy to support us as we build our
inclusion strategy. We have held listening
sessions across the Group and we are
building a clear plan to recognise inclusivity
as a global business.

New risk

Category/Issue

Risk description

PRIMARY WATCHLIST

DATA ANALYTICS/DATA
MANAGEMENT

MARKETING/CONSUMER
TARGETING

RISK AND CRISIS MANAGEMENT

SALES CHANNEL OPTIMISATION

A lack of understanding and effective use of collected data could result in Ted Baker missing
opportunities to strengthen its business and drive informed decision-making through robust
management information and data analysis. For example, this could include using collected
customer data to perform analytics that gather insights on customer demands and use this to
improve decision-making and customer engagement.

Limited investment in marketing and supporting the new product mix or targeting the incorrect
customer profile, new influencers and joint venture partners could lead to missed revenue
opportunities, with products failing to realise their full potential and being overshadowed by
competitor products. Focusing on customers who don't align with Ted Baker’s product and
brand could also lead to a loss of brand equity.

The absence of a clearly defined risk management strategy and poor dedicated resource
could result in a lack of awareness of internal and external business critical risks. This could
lead to: a lack of insight into how and when risks could affect the business and the potential
damage they could cause; an inability to identify and address emerging risks; a failure to
monitor changes in the level of existing risks; and a failure to ensure effective controls are in
place to manage these risks. All this could result in failure to proactively manage risks, leading
to the need to adjust the business strategy and/or associated assumptions with little warning.

Disagreement about and a lack of clarity on Ted Baker’s channel strategy, including our
eCommerce strategy, could result in missed growth opportunities. This could lead to
competitors overtaking Ted Baker’s market share with customers seeking out a more
versatile retailer.

INCREASING REGULATIONS/LEGAL/
TAX COMPLIANCE

Failure to comply with relevant regulatory requirements in relation to tax, financial reporting,
health and safety and GDPR could lead to fines and legal actions. For example, fines or
penalties when there is failure to comply with changing export/import regulation.

SUSTAINABILITY AND CLIMATE
CHANGE

Our business depends on our suppliers being able to maintain continuity of service to provide
a consistent supply of goods to customers. In addition, natural events and increasing changes
to governmental policy may affect our suppliers ability to do this.

Ted Baker plc Annual Report and Accounts 2021

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VIABILITY STATEMENT

In accordance with Provision 31 of the UK Corporate
Governance Code dated July 2018 (the Code), the Directors
have assessed the prospects and viability of the Group, taking
into account the Group’s current position and the potential
impact of principal risks documented above.

The Group’s objective remains the same; to continue to grow
and develop the Ted Baker brand through Ted’s Growth
Formula which is supported by the actions undertaken during
the year to support the balance sheet in the sale and lease
back of our head office and equity raise.

The Group operates a three-year plan, which is updated and
reviewed regularly by the Board. Within the three-year plan,
detailed scenario planning and stress testing was carried out
over a period to 27 January 2024, in the form of a Base Case
and a Severe but Plausible forecast, to assess the viability and
prospects of the Group with a high level of certainty. The key
assumptions made in the formulation of the three-year plan are
the increased exposure and promotion of the Ted Baker brand
through digital, geographical diversification of sales, growth of
eCommerce and turnover projections. The Severe but Plausible
forecast was overlaid after considering a prolonged severe
disruption to trade caused by the Covid-19 pandemic, while
also considering current and future risks disclosed in the
Annual Report.

The Directors’ assessment has been further enhanced by
analysing the current and future risks, controls and assurances
available, resulting in a clear picture of the risk profile across
the whole business. The principal risks that could affect the
future viability of the Group over the three years are identified
on pages 50-53 in Principal Risks and Uncertainties. In making
this assessment the Directors have considered the resilience of
the Group to the occurrence of these risks in both Base Case
and Severe but Plausible scenarios.

In addition, the Board has considered the impact on the
Group’s cash flows, headroom, covenants and other key
financial ratios under both Base Case and Severe but Plausible
scenarios. The Board has considered the Group’s refinancing
and covenants within the Financial review section on page 30
and below within the Going Concern section. Sensitivity
analysis was used to stress test the Group’s Base Case and
Severe but Plausible scenarios to confirm that sufficient
headroom would remain available under the Group’s credit
facilities. The sensitivity analysis was performed in the form of
a Reverse Stress Test described further in the Going Concern
section below.

The Group has also stress-tested the Group’s strategic plans in
light of Covid-19 and the impact on the business and global
trade. The situation is continually evolving which in turn is
creating uncertainty across most of the Group’s markets.

The Board has considered that under each scenario tested,
the mitigating actions would be effective and sufficient to
ensure the continued viability of the Group and adequate
liquidity and covenant headroom exists. The Directors have
further considered the Severe but Plausible downside scenario
and the associated uncertainty expanded in the Going
Concern section below.

For the reasons stated above, based on the robust assessment
undertaken, the Directors confirm they have a reasonable
expectation that the Group will be able to continue in
operation, and meets its liabilities as they fall due, over the
period of assessment.

54 Ted Baker plc Annual Report and Accounts 2021

GOING CONCERN STATEMENT

The consolidated financial statements have been prepared on
a going concern basis. The Directors have prepared a going
concern assessment covering the 12-month period from the
date of signing these financial statements, which demonstrates
that the Group is capable of continuing to operate within
its existing facilities and can meet its financial covenant tests
during the period. The Directors’ assessment considers the
principal risks facing the business, and a series of financial
forecasts, which include a review of current performance and
forecasts of revenue across all sales channels combined with
ongoing expenditure including capital expenditure and
borrowing facilities. The forecasts have been prepared whilst
considering various levels of disruption from the Covid-19
pandemic. The Directors have concluded that it is appropriate
to adopt the going concern basis of accounting in preparing
these financial statements for the reasons set out below.

The Group acted quickly to mitigate the impact of Covid-19
by taking steps to strengthen the balance sheet through the
restructuring of debt, the sale and leaseback of the Group’s
head office and the equity raise completed in June 2020.
At 30 January 2021, the Group held £66.7 million of
cash balances.

At 30 January 2021, the Group’s financing arrangements
comprised of two facilities, a £107.8 million Revolving Credit
Facility maturing in September 2022, and a £25.0 million
restricted Revolving Credit Facility maturing in January 2022.
At year end, neither facility had been drawn down. On 24 May
2021, the Group successfully refinanced existing debt facilities,
reducing the size of the facility to reflect future forecasts for the
business. The existing facilities totalling £132.8 million have
been replaced with a £90 million Revolving Credit Facility,
reducing to £80 million in January 2022, before maturing in
November 2023. Financial covenants within the facility have
been set at levels that reflect past store closures and future
levels of disruption modelled within the Severe but Plausible
scenario. The Directors have concluded that this facility
provides adequate liquidity and financial covenant headroom
under all downside scenarios described below.

In making the going concern assessment, the Group has
modelled a number of scenarios for the period to June 2022.
The Base Case scenario is consistent with the Board approved
FY22 budget. This scenario assumes there are no further
lockdowns, with a slow return to global economic recovery.
This includes growth assumptions that factor a continued
challenge to physical retail, wholesale and licence channels.
The Group has forecast strong growth in the online retail
channel driven by a continued customer shift towards online
spend compared to pre-Covid preferences, supported by

continued investment in our online platforms and related
marketing spend. Total forecast Group sales remain below
pre-Covid levels for the 12-month going concern period with
margins returning to pre-Covid levels.

In light of the considerable uncertainty surrounding the ongoing
impact of Covid-19, a Severe but Plausible downside scenario
has also been modelled, applying severe but plausible
assumptions to the Base Case. This scenario assumes all sales
channels, including own stores, online, wholesale and licence
income, are further disrupted throughout the 12-month going
concern period. Further, this scenario assumes a two-month
lockdown in December 2021 and January 2022, with
a gradual recovery in the months that follow. The Severe
but Plausible scenario does not assume any deterioration in
margins and only assumes that directly attributable variable
costs are reduced, with all remaining costs in line with the
Base Case. Within the 12-month going concern period, this
translates to total turnover that is +23% and -32% against the
same period in 2021 and 2020. Under the Severe but
Plausible scenario, the Group has adequate liquidity and
covenant headroom throughout the going concern period.

In addition, the Directors have performed a Reverse Stress Test,
applying further downside trade reductions to the Severe but
Plausible scenario to demonstrate the value of lost sales until
financial covenants within the facility signed 24 May 2021 are
breached. Liquidity under the facility is adequate, even under
the Reverse Stress Test. In addition to the trade reductions
described below, this scenario considers the year-to-date
performance as at the date of the assessment and a reduction
to directly attributable variable costs associated with a reduction
in turnover. If such a downside scenario were to materialise,
the Directors would consider significant cost savings initiatives
around areas such as central and head office payroll,
overhead expenditure, marketing costs, rents, warehousing
costs and professional fees; however for the purpose of this
analysis, none of these cost saving efforts are included within
the modelling. In the Reverse Stress Test, trade reductions have
been gradually applied to all sales channels during the
12-month going concern period. Store, wholesale and licence
income reductions of up to 20% and online reductions of up
to 10% have been applied against the Severe but Plausible
scenario. Within the 12-month going concern period, this
translates to total turnover that is +11% and -39% against the
same period in 2021 and 2020. In the Reverse Stress Test, the
quarterly financial covenant reported in April 2022 would be
the only one impacted during the going concern assessment
period, allowing the Directors time to take appropriate actions
if there are early signs of a prolonged reduction in trade.

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As a result of the above analysis, the Directors have
concluded that the Group has sufficient financial resources
to continue in operation and meet its obligations as they fall
due for the 12-months from the date of approval of these
financial statements.

NON-FINANCIAL INFORMATION REGULATION

Under sections 414CA and 414CB of the Companies Act
2006, as amended by the Companies, Partnerships and
Groups (Accounts and Non-Financial Reporting) Regulations
2016, we must include in our Strategic report a non-financial
information statement. The information required is included in
Our sustainability story and Risk Report on pages 34-53.
You can read about our business model on pages 12-19 and
our non-financial key performance indicators can be found
on pages 24-25.

SECTION 172(1) STATEMENT AND STAKEHOLDER
ENGAGEMENT

See pages 63-64 within Governance for our section 172(1)
Statement. This describes how the Directors have had regard
to stakeholders’ interests when discharging their duties set out
in Section 172 of the Companies Act 2006. Our engagement
activities with stakeholders and the impact of those interactions
are set out on pages 64-65.

The Board approved the Strategic report on pages 1-56 of this
Annual Report on 13 June 2021.

By order of the Board

Peter Hearsey-Zoubie
General Counsel & Company Secretary
13 June 2021

56 Ted Baker plc Annual Report and Accounts 2021

GOVERNANCE

REPORT

GOVERNANCE REPORT

58 Board of Directors
60 Executive Team
62 Chair’s introduction to governance
63 Corporate governance
72 Audit & Risk Committee Report
76 Nominations Committee Report
80 Remuneration Report
94 Directors’ report
97 Statement of directors’ responsibilities

Ted Baker plc Annual Report and Accounts 2021

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JOHN BARTON
Chair

RACHEL OSBORNE
Chief Executive Officer

DAVID WOLFFE
Chief Financial Officer

Nationality British
Appointment Appointed to the
Board as Chair 1 July 2020

Skills and experience
John has a wealth of experience,
having held senior non-executive
positions across a number of
leading consumer-facing businesses.
John has previously served as Chair
of Next plc and Cable and Wireless
plc. John has also previously been
Senior Independent Director of both
WH Smith plc and SSP Group plc.

External appointments
John also serves as Chair of Easyjet
plc, having held the role since 2013.
John is also a Non-Executive
Director of Matheson & Co Ltd.

Committee membership

Nationality British
Appointment Rachel joined
Ted Baker as Chief Financial Officer
11 November 2019 and was
appointed Acting Chief Executive
Officer 10 December 2019
and Chief Executive Officer
30 March 2020

Skills and experience
Rachel is a Chartered Accountant
with more than 20 years’ brand
and retail sector experience. Rachel
joined Ted Baker from Debenhams
Retail Limited, where she held the
role of Chief Financial Officer.
Rachel has broad experience
of consumer-facing brands in her
previous positions as Chief Financial
Officer at Domino’s Pizza Group plc,
Finance Director of Group Enterprise
at Vodafone and Finance & Strategy
Director at John Lewis. She has also
held senior positions with Sodexo,
Kingfisher and PepsiCo.

External appointments
N/A

Nationality British
Appointment David joined as
interim Chief Financial Officer
2 January 2020 and was
appointed Chief Financial Officer
18 May 2020

Skills and experience
David has over 20 years’
experience in finance roles for
both public and private businesses,
including the Group CFO role at
HMV Group Plc. He has held senior
financial and executive positions at
leading global consumer and media
businesses, including the roles of
Finance Director of ITV Studios,
CFO at AOL Europe, and Finance
Director, BBC Magazines and
Consumer Publishing. From 2018
until joining Ted Baker, David has
been Interim CFO in a series of
private equity backed retail and
technology businesses.

External appointments
N/A

Committee membership

58 Ted Baker plc Annual Report and Accounts 2021

ANDREW JENNINGS OBE
Independent Non-Executive Director

Nationality British
Appointment Appointed to the
Board 1 February 2014

Skills and experience
Andrew has invaluable experience
in the international retail industry of
over 45 years at some of the world’s
most respected high-end speciality
and department stores. Previously,
CEO of Holt Renfrew Canada,
CEO of the Karstadt Group in
Germany and prior to this has
held a number of senior executive
positions at leading UK and
international retailers including
President, Saks Fifth Avenue in the
USA; Group MD, Woolworths (SA);
General Manager, Harrods; CEO,
House of Fraser in the UK; and
Deputy Chair, Brown Thomas
in Ireland.

External appointments
Chair of The Prince’s Trust Retail,
Leisure & Hospitality Board. Chair
of Boschendal SA, Board member
Alpha SA, Chair of 42 Acres
Retreat & Farm.

Committee membership

A N R

HELENA FELTHAM
Senior Independent
Non-Executive Director

Nationality British
Appointment Appointed to the
Board 1 May 2019 and as
Senior Independent Director
17 December 2019

Skills and experience
Helena has over 30 years’
experience in Retail and Human
Capital Leadership. She was formerly
People Director at B&Q and, prior
to that, held the role of Human
Resources Director at Marks &
Spencer, Woolworths South Africa
and Jack Wills. She has also spent
a number of years of her career
in executive search with Odgers
Berndtson, covering senior
appointments across public and
private sectors. Helena has
served as a NED in the NHS,
as an independent director for
the Assembly of Wales and as
a Justice of the Peace.

External appointments
Helena is a NED and Trustee for
the Retail Trust where she chairs
the Wellbeing Committee. She
is also a director and advisor at
Dogwoof, a film production and
distribution company.

Committee membership

A D N R
Also, designated Non-Executive
Director for workforce engagement.

JON KEMPSTER
Independent Non-Executive Director

COLIN LA FONTAINE JACKSON
Non-Executive Director

Nationality British
Appointment Appointed to the
Board 17 December 2019

Nationality British
Appointment Appointed to the
Board 1 September 2020

Skills and experience
Jon is a chartered accountant and
his career has included CFO board
positions at Delta Plc, Fii Group Plc,
Linden Plc, Low & Bonar Plc, Frasers
Group Plc, Utilitywise plc and
Wincanton plc. Jon qualified as
a Chartered Accountant with
PriceWaterhouse in 1990 and has
a BA (Hons) in Business Studies
from the University of Liverpool.
Jon’s broad experience and
financial background brings
additional knowledge and support
to the Board and the Audit & Risk
Committee as Chair.

External appointments
Jon is a Non-Executive Director
and Audit & Risk Committee Chair
at Redcentric plc, Bonhill Group plc,
Serinus Energy plc and a Trustee
of the Delta plc pension scheme. Jon
is also Non-Executive Director of
FireAngel Safety Technology Group
plc and advises other private groups
on an ad hoc basis.

Committee membership

A N R

Skills and experience
Colin brings strong corporate finance
and legal experience to the Board,
having spent over 25 years advising
clients across a range of industries.
Prior to founding corporate finance
boutique Hopton Advisers in 2014,
Colin worked at Quayle Munro,
ING Barings and Charterhouse
Securities. He qualified as a solicitor
with Clifford Chance.

External appointments
Colin is a Partner at Hopton Advisers
LLP. He is also a Non-Executive
Director of Ivory Worldwide
(Holdings) Limited and MAIA
Technology Ltd.

Committee membership
None

Audit & Risk Committee

Disclosure Committee

N Nominations Committee

Remuneration Committee

Chair

Ted Baker plc Annual Report and Accounts 2021

GOVERNANCEREPORTOur Executive Team has a wealth of experience and skills developed at Ted Baker
and other leading brands. As a result, we have well-rounded resources to call on to
steer the business and overcome new challenges.

m Skills and experience
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RACHEL OSBORNE
Chief Executive Officer

Appointment March 2020

Skills and experience
Rachel is a Chartered Accountant with over 20 years’ brand
and retail sector experience. She joined Ted Baker from
Debenhams Retail Limited, where she held the role of Chief
Financial Officer. Rachel has broad experience with consumer-
facing brands in her previous positions as Chief Financial
Officer at Domino’s Pizza Group plc, Finance Director of
Group Enterprise at Vodafone and Finance & Strategy Director
at John Lewis. She has also held senior positions with Sodexo,
Kingfisher and PepsiCo.

DAVID WOLFFE
Chief Financial Officer

Appointment May 2020

Skills and experience
David has over 20 years’ experience in finance roles for both
public and private businesses, including the Group CFO role
at HMV Group Plc. He has held senior financial and executive
positions at leading global consumer and media businesses,
including the roles of Finance Director of ITV Studios, CFO
at AOL Europe and Finance Director, BBC Magazines and
Consumer Publishing. From 2018 until he joined Ted Baker,
David was interim CFO in a series of private equity backed
retail and technology businesses.

ANTHONY CUTHBERTSON
Global Creative Director

Appointment November 2020

Skills and experience
Anthony has more than 20 years’ experience in the fashion
industry. He brings a wealth of experience and creativity to
Ted Baker with his past roles as Global Creative Director/
Design Director at Topshop/Topman, Roberto Cavalli, Sass &
Bide, Joseph, Rene Lezard, Ralph Lauren, Burlington and DAKS.
He has also consulted for Mulberry, Victoria Beckham, Donna
Karen, Amanda Wakeley, Moncler and Max Mara.

60 Ted Baker plc Annual Report and Accounts 2021

PETER COLLYER
Chief People Officer

Appointment January 2020

Skills and experience
Peter’s remit includes all things people and culture related.
Our sustainability and ethics team also reports to him.
His career spans 29 years in HR with 25 in retail, hospitality,
leisure, investment banking and consumer products. Previous
roles include: People Experience Director, ASOS.COM, SVP
Global HR, Claire’s Inc., VP HR Retail & Licensing, The Walt
Disney Company Ltd, Director People & OD, Oasis Stores Plc
and Senior HR Executive at Yamaichi International. He began
his career as an apprentice chef and gained broad experience
working in hospitality for 10 years.

JENNIFER ROEBUCK
Chief Customer Officer

Appointment April 2020

Skills and experience
Jen joined Ted Baker as a Non-Executive Director in October
2017 and became Chief Customer Officer on 1 April 2020.
She is a consumer marketing and digital commerce expert with
more than 20 years’ brand, digital and consumer experience.
She joined Ted Baker after co-founding a consumer
technology entertainment business REVL, where she held the
role of CMO and Co-founder. Jen has a broad experience of
marketing and eCommerce in her previous positions as CMO
at Feelunique, Multi-Channel Director at French Connection
and Head of Music and Customer Acquisition at Orange
Telecom. She has also held senior positions at Bank of America,
Nectar (LMUK) and Aurora Group (Warehouse) in addition
to co-founding a restaurant chain, Tortilla, in the UK.

TIKKI GODLEY
Group Trading Director

Appointment May 2005

Skills and experience
Tikki joined Ted Baker as a Junior Merchandiser in 2005
and worked her way up through the Group to become
Trading Director in 2014. With over 20 years’ experience
in merchandising, she also took on responsibility for the
Buying and Production departments in 2020.

ARI HOFFMAN
CEO – North America

Appointment December 2019

Skills and experience
Ari has responsibility for Ted Baker’s North American market.
Before joining Ted Baker, he has spent his career in the fashion/
retail space, leading and managing the Americas for respected
international brands, including Scotch & Soda for five years.
He was CEO at Gant for 10 years, President of Yves Saint
Laurent for 13 years and President of Lacoste for five years.

HELEN COSTELLO
Group Commercial & Business Development Director

Appointment December 2020

Skills and experience
Helen is responsible for wholesale, retail, territory franchise and
joint ventures outside North America as well as overall product
licensing. She is collaborating with the Executive Team to
re-energise the brand proposition and create sustainable
profitable growth. She has held key commercial and executive
appointments at several high-profile global fashion brands,
most recently as Managing Director, International at rag&bone
and previously as Wholesale and Franchise Director at
Bottega Veneta and General Manager of Prorsum at Burberry.

LEON SHEPHERD
Chief Information Officer

Appointment November 2017

Skills and experience
Leon is accountable for technology strategy and delivery
alongside leading the overall business transformation
programme. He has a breadth and depth of experience
gained from senior leadership roles in a number of large scale,
global organisations such as Marks & Spencer and Vodafone.
He is a strong advocate for technology innovation, in particular
in the areas of cloud technology, AI and cyber security.

PETER HEARSEY-ZOUBIE
General Counsel & Company Secretary

Appointment February 2019

Skills and experience
Peter qualified as a solicitor in 1989 and practised in the City
at Field Fisher before moving in-house. He has over 20 years’
in-house legal and governance experience in the retail sector.

DIRECTORS WHO RESIGNED
DURING THE PERIOD

JENNIFER ROEBUCK
Non-Executive Director

Jen was appointed as a Non-Executive Director on
29 September 2017. Following the announcement on
29 January 2020 that Jen would be taking up the executive
position of Chief Customer Officer, Jen resigned her position
as a Non-Executive Director and left the Board from
1 April 2020.

Committee membership
Jen was a member of the Nominations Committee.

SHARON BAYLAY
Non-Executive Director and Acting Chair

Sharon was appointed as a Non-Executive Director on
15 June 2018 and Acting Chair on 10 December 2019.
Following the announcement of the appointment of John Barton
as Chair, Sharon subsequently decided not to seek re-election
at the AGM on 21 July 2020 and ceased to be a director
at that date.

Committee membership
Sharon was also the designated director for
workforce engagement.

Ted Baker plc Annual Report and Accounts 2021

GOVERNANCEREPORTe
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Doing the right thing
There have been a significant number of changes to the Ted Baker Board over
the last 12 months. I would like to thank my predecessor Sharon Baylay for her
hard work in steadying the ship through the legacy management challenges
and issues around overstatement of inventory. With my arrival and the new
Board now in place, good governance has been high on our agenda as
we guide the business forward.

When it comes to governance, there are many important
principles and disclosures that must be applied from the
continually evolving worlds of regulation and legal standards.
But, in the day-to-day running of the Company, I believe
governance is about something very simple, something that
is at the heart of the way Ted Baker does business.

As highlighted throughout this Annual Report, there is a strong
sense of ‘doing the right thing’ that informs everything we
do – this includes everyone at every level of the Company,
and the Board is no exception. Good governance underpins
a company’s ability to thrive and find new ways to grow
through even the most difficult times. I believe keeping our
approach to governance focused will build long-term value
for our shareholders, our people and for our customers, who
are loyal to brands they believe in and trust.

The new Ted Baker Board is made up of people with broad
experience and a strong ethos and work ethic. It combines the
knowledge and expertise of long-standing member Andrew
Jennings, with the external perspectives of our new members,
CEO Rachel Osborne, CFO David Wolffe, Helena Feltham
and Ray Kelvin’s Nominee Director, Colin La Fontaine Jackson.
Their dedication and insights have underpinned the rebuilding
of trust within the business. Following an internal evaluation by
our Company Secretarial team, it was highlighted that Sharon
Baylay stepping down and Jennifer Roebuck moving to the
Executive Team had thrown out the gender balance of the
Board. As a result, our Nominations Committee will be
recommending ways to ensure diversity of expertise, skills,
experience, background, perspectives, and independence
of thought and actions are reflected in our Board membership.

When it comes to decision making, we are very collegiate,
and our meetings are conducted in an open and supportive
environment. We look at each decision through the lens of
our purpose, and consider the interests of our customers and
suppliers, as well as team members, shareholders and wider
stakeholders. This broad and robust approach has helped
make change happen smoothly both internally and externally.

Over the last year, the Board has worked through every
major decision with the Executive Team, both challenging and
supporting them. Many of these decisions were fundamental to
the survival of the business, including the sale of the Ugly Brown
Building, the equity raise and the cost-out programme.

Much excellent work on employee engagement has been
led by Helena Feltham with our new Chief People Officer,
Peter Collyer. Open and transparent communication is key to
our ability to exercise good governance, and the establishment
of the independent team members ‘Fresh Eyes’ listening groups
has helped us make progress with this and opened up
a constructive dialogue between our team members and the
Board. I look forward to seeing the bonds of trust between the
Executive Team, our team members and the Board continue
to strengthen in the coming year.

The unusual year we have been through has required our
Non-Executive Directors to be far more involved than usual
and this has made a significant and positive difference to the
business. Their constructive input is much appreciated by
everyone. The pandemic has raised other challenges beyond
the business itself, for example requiring people to adapt to
online Board meetings. Everyone has embraced the new
normal here and, despite the barriers thrown up by not meeting
in person, we have successfully built a strong and cohesive
working relationship very quickly.

The subject of risk has been high on our agenda this year.
Our Audit & Risk Committee, led by Committee Chair
Jon Kempster, has worked with Deloitte LLP to identify key
areas of risk. The review was very thorough, and we are
pleased with the outcomes, which will be very important in
our governance of the business in the long term. You will find
details on page 73.

As we step back into our normal roles (and physically back
into the boardroom itself in the near future I hope!) I would like
to thank the Board, the Executive Team and everyone in the
Ted Baker team for their continuing dedication and commitment.

John Barton
Chair

62 Ted Baker plc Annual Report and Accounts 2021

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CREATING AND MAINTAINING THE HIGHEST
STANDARDS OF GOVERNANCE

This section shows how our Directors have performed
their duties under section 172 (s172) of the Companies Act
2006. S172 sets out a series of matters to which the Directors
must have regard in performing their duties to promote the
success of the Company for the benefit of its shareholders,
which includes having regard for other stakeholders. Some
information mentioned here is from other parts of the Strategic
report and has been cross-referenced.

It has been a very active year for the Board, during which it has
had to address a number of critical issues. The Board approach
has focused on carrying out its duties to the highest standards
of business conduct. It is responsible for setting, monitoring
and upholding the culture, values, brand and reputation of
the Company to ensure that we meet our obligations to our
shareholders, team members, customers and other stakeholders.
The Executive Team has worked to make sure the culture is
being lived day-to-day throughout the organisation.

The Board is also involved in the wider social environment
including across the supply chain and all issues concerning
ESG. More details can be found in pages 34-47 of the
Strategic report.

Key strategic decisions in FY21
The year was dominated by the impact of Covid-19 and
achieving key corporate transactions including the refinance
and equity raise, along with the sale and lease back of our
head office. At the start of the financial year, in February 2020,
we announced a strategic update on the Group’s review of
operational efficiency, costs and business model, together with
our key strategic priorities. The Board decided on six priorities
for the year ahead, and having regard for the wider success of
the business and all its stakeholders, took the difficult decision
to reduce costs which affected all our team members as we
looked into restructuring the business.

On 23 March 2020, the Board announced it had agreed
the sale and lease back (for a short period) of the head office
in King’s Cross, London, along with an increase in our bank
facilities by £13.5 million, both as part of the strengthening of
our balance sheet. These decisions were essential to ensure
stronger and continuing relationships with our partners across
the business including product suppliers, wholesale partners
and lenders. At the same time we were actively controlling

SECTION 172 STATEMENT

Section 172 (s172) of the Companies Act 2006
S172 sets out a series of matters Directors must have
regard for while performing their duty to promote the
success of the Company for the benefit of its shareholders
and other stakeholders.

The Board is responsible for setting, monitoring and
upholding the culture, values, brand and reputation of
the Company to ensure we meet our obligations to our
shareholders, team members, customers and other
stakeholders. The Executive Team has worked hard
to make sure our culture is woven into the DNA of the Group.

The Board is also involved in the wider social environment
in which it operates including across the supply chain and
all issues concerning ESG. More detail can be found on
pages 34-47 of the Strategic report.

all our costs. This happened at a time of increased global
uncertainty caused by Covid-19, which was hitting the
headlines as the virus spread around the globe. The Board
and management team were actively engaged with various
stakeholders to get a greater understanding of Covid-19.
These included reaching out to governments and relevant
trade associations to understand the support available for
the business and our team members, and how best to protect
customers and team members. The Board also took the difficult
decision to reduce costs and protect cash flow, stopping all
discretionary spend and rescheduling all possible payments.
It also took the decision to pause team member consultation on
possible redundancy in light of available government support
to protect those team members’ positions.

Before the announcement on 1 June 2020 of Ted Baker’s full
year results and the equity raise undertaken via a proposed
firm placing, placing and open offer, the Board was actively
engaged in a regular dialogue with its lenders, advisers and key
shareholders to agree the most appropriate way to raise funds.
While alternative arrangements were discussed, the Board
concluded that the launch of the firm placing, placing and
open offer was the best solution, allowing existing and new
shareholders to participate. The Chief Executive Officer and
Chief Financial Offer engaged with major existing and
prospective shareholders as part of the equity raise discussions.
The Board also kept the business and team members involved
by holding virtual town hall meetings where the team members
could question the Executive Team. The equity transaction
successfully raised £95 million gross proceeds via the firm
placing and placing plus a further £10 million gross proceeds
under the open offer. The Board also approved and announced
the full year results on 1 June 2020 which reported a full year
loss of £79.9 million before tax (restated to a full year loss of
£77.6million before tax), mainly comprising total charges of
£45.9 million related to inventory, £16.2 million related to
store impairment of assets and £77.2 million related to losses
on the disposal of the Asian business. The Board adopted Ted’s
Growth Formula to build on the strategic priorities update of
February 2020, backed by the proceeds from the capital raise.
The Board set out three pillars to build on the strengths of the
Group – stabilising the foundations, driving growth and
enhancing operational excellence, each with its own activities
and targets. We also shared the strategic priorities with team
members across the business to create wider engagement and
understanding of decisions and actions taken.

On 18 June 2020, the Company announced its shareholders
had approved the equity raise and the sale and lease back
of the Ugly Brown Building. Due to Covid-19 restrictions the
general meeting was a closed meeting, but shareholders
had the opportunity to raise questions by email in advance.
All resolutions received over 99% support from shareholders.

The Company held its annual general meeting on 21 July 2020,
having placed its notice of AGM on the Company corporate
website and posted the accounts to those who wanted to receive
them by post. Again, due to Covid-19 restrictions, the meeting
was a closed meeting with all resolutions receiving shareholder
support including the new remuneration policy and associated
share schemes. The Board, and in particular the Chair of the
Remuneration Committee, had engaged with key shareholders
to make sure they were comfortable with the proposed new
remuneration policy and share incentive schemes.

Ted Baker plc Annual Report and Accounts 2021

GOVERNANCEREPORT

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Throughout this period the Board remained closely involved
in the actions taken to support the business, our team members
and customers during the pandemic. Our Covid-19 action plan
was driven by the Executive Team and the Board was regularly
informed and involved in the decisions and rapidly changing
positions across the globe where the business operated
stand-alone stores, concessions and franchise businesses.

Their priority was the safety and wellbeing of all our partners
and stakeholders at all times. Many of our retail team members
were furloughed through the various closure periods in different
countries. The business sought to keep our team members
up to date with business developments as far as regulations
permitted. In the summer the Board also took the difficult

decision to end the pause on consultation and, following a further
review of costs, to restart the February 2020 consultation. It was also
decided to begin a further consultation process, working with the Fresh
Eyes employee forum, as further cost reductions had to be found to fix
our foundations and align the cost base with the business model.

The Board also received regular updates on the progress of Ted’s
Growth Formula to monitor developments of our strategic priorities
and Fashioning a Better Future. They also did an in-depth review of
ESG developments to ensure the Group was actively engaged in
working with our partners in the supply chain and community to fulfil
the Group’s aims. More details of this can be found on pages 34-47.

The table below sets out further details on stakeholder engagement
during FY21.

Stakeholders

Why are they important

What is our approach

OUR TEAM
MEMBERS

The commitment of our team
members is essential to the
success of the business, to deliver
on our strategy for our customers
and product.

ɫ Engage with our team members on a wide range of topics including the
new values, mission and purpose, and trading updates through our Fresh
Eyes Forum, town hall meetings, internal communications and informal
meetings with the Board and Executive Team.

ɫ Helena Feltham, our Director for employee engagement, met with the
Fresh Eyes Forum representatives to understand areas of concern
and improvement across the business and updated the Board on
these conversations.

ɫ We have established new digital platforms for the development and

training of our team members.

ɫ Our team members are able to share in the business as shareholders

through participation in our Company share plans.

ɫ We are committed to further improving our inclusivity and team member

engagement and talent development in line with our values.

ɫ More details can be found in pages 35-38.

OUR SUPPLIERS We operate with a wide range

ɫ We work closely with a wide range of manufacturing suppliers to

of suppliers across the globe
from product manufacturing to support
services and many other third-party
businesses. It is vital that we build
trusted working relationships with
all our partners to help us deliver
great products and service to our
customers and team members.

build a strong relationship and deliver on our promise of ‘Fashioning
a Better Future’.

ɫ We review the actions taken to prevent modern slavery across our supply

chain including inspections of premises.

ɫ We work closely with new and existing suppliers to make sure they

understand our culture, ethical standards and requirements set out in our
supplier manual.

ɫ More details can be found on pages 38-40.

OUR
COMMUNITIES

We affect the communities we and
our suppliers and other partners
operate in and we must be fully
engaged in contributing to our
communities and engage in
long-term support including
managing our impact on
climate change.

OUR
SHAREHOLDERS

Our retail and institutional
shareholders are owners of
the Company and we must
make sure we work to deliver
our strategic goals.

OUR
CUSTOMERS

Our purpose is ‘to be the most
engaging global British lifestyle
brand’. It is why we exist for our
customers and as a business. It is
essential that we understand our
customers and ensure that we
deliver what they are seeking.

64 Ted Baker plc Annual Report and Accounts 2021

ɫ In previous years, we have created and delivered education-focused
challenges, masterclasses, talks and presentations to local partners
and schools.

ɫ This year, due to Covid-19, we launched ‘Stylish Acts of Kindness’ where we
donated clothes and some team members volunteered their time to support
the NHS. We also launched ‘Ted’s Bazaar’, an online charity pop-up shop
with 100% of profits going to local communities facing current and future
challenges due to the pandemic.

ɫ We committed to make the switch to 100% more sustainable materials

in all our collections by 2030 to better protect the environment.

ɫ Full details of the activities and engagement in the year can be found

on page 41.

ɫ The Board regularly meets with shareholders, who can also attend the AGM.
ɫ The Board engaged with our largest shareholders while developing our

revised Remuneration Policy to ensure that the shareholders’ and
management interests remained aligned and in the best interests of
the Company.

ɫ The CEO and CFO met with key shareholders and prospective

shareholders to understand their position on the proposed capital raise
and sale and lease back of the head office to ensure support for the plans.
ɫ The Chair and CEO met with institutional investors in the year, as well as with
Ray Kelvin, which together with monthly reports from the Company brokers
helped the Board hear and understand investors’ views.

ɫ The Board receives regular details on customer service.
ɫ We receive detailed analytics to understand customer satisfaction including

NPS scoring and other metrics.

ɫ We work to ensure that governance in relation to customer data and other
information is protected together with scrutiny of all customer-related areas.

ɫ We are engaged with a comprehensive review of the web platform to

better enhance the customer experience and journey.

THE UK 2018 UK CORPORATE GOVERNANCE
CODE (THE ‘2018 CODE’)

The Code published by the Financial Reporting Council sets
out standards of good practice in relation to board leadership
and company purpose; division of responsibilities; composition,
succession and evaluation; audit, risk and internal control;
and remuneration.

The 2018 Code is available from the Financial Reporting
Council’s website: www.frc.org.uk. This is our second year of
reporting under the 2018 Code. The Code requires us to set
and maintain a meaningful corporate culture with a strong
ethical base. It also requires the Directors to lead, build and
maintain a positive relationship with stakeholders across the
business. During the year, we have complied fully with the
Code – more details can be found on page 68. In this section
we show how the Board has applied the principles set out in
the Code.

Board leadership, company purpose and goals
Good governance requires Board ownership and accountability
to make sure the right behaviours and culture are being set
and we are striving to bring it to life across the business.
Good governance will support the growth and strategy set
under Ted’s Growth Formula. Governance frameworks around
this have been put in place and will be reviewed by the Board
and applied to our trading subsidiaries. The Board will continue
to review governance improvements in the year ahead.

PURPOSE AND CULTURE

The Board is collectively responsible for the long-term success
of the Company and for delivering value to shareholders.
The Board offers strategic leadership and effective oversight
of the Group’s operations, either directly or through the work
of its principal committees. It has ultimate responsibility for the
oversight and monitoring of the Group’s governance, principal
risks and control framework. Further information regarding
the Group’s internal financial control and risk management
systems can be found in the Audit & Risk Committee Report
on pages 72-75.

The Board’s primary focus is to support and further the Group’s
brand purpose: ‘to create and celebrate the unexpected in
the everyday’ and its mission to be the most engaging global
British lifestyle brand. The Board establishes the Group’s
purpose, goal, values and strategy. This is described in more
detail in the report on pages 12-20 including more detail
about our transformation strategy, Ted’s Growth Formula.
We reviewed the Group’s values and culture during the financial
year (details can be found on pages 35-38) and launched
these to the business at the start of the new financial year.

The Board also reviews financial and operational
performance, risk management and appetite, along with the
Group’s capital structure and plans proposed by management
to implement the agreed strategy. The Board ensures that
sufficient resources are available to meet the agreed
objectives. In light of Covid-19 and the recent sale and lease
back of the head office and the equity raise and refinance,
the Board has carefully considered the need for an appropriate
debt structure, liquidity and expenditure to ensure the long-term
success of the business.

This year the Board has made difficult decisions around the
costs of the business. Despite this, the Group’s culture remains
strong and closely aligned to the Group’s purpose and mission
even with remote working becoming the norm for many people.

We set up the Fresh Eyes employee forums, with elected
representatives from across the business taking part. This gives
the Board and senior management the chance to engage
directly with team members and get feedback on the business.
The Fresh Eyes Forum will continue to be a key part of the
business in the future. More details about the Board’s
engagement with the team can be found on pages 64-65.

STAKEHOLDER ENGAGEMENT

The Board carefully considers the interests of shareholders,
key stakeholders and wider society as part of our decision-
making process. You can read more about our stakeholder
engagement activities in the stakeholder engagement
statement above and in the ‘communication with shareholders’
section on page 70 below.

Further information about the Board’s activities during the year,
including examples of how it considered the interests of
stakeholders, is found on page 64 and page 70. The Group’s
ethics and sustainability policies help us understand Ted Baker’s
impact on the world and how we contribute to wider society.
You can read more about this on page 39.

WORKFORCE POLICIES AND PRACTICES

The Board constantly reviews workforce policies and practices
to make sure they are consistent with our values and support
our sustainable long-term success. During the year, we reviewed
and endorsed the revised policies and practices – see page 37
for details. There was a further update on the Group’s ethics
and sustainability and more details can be found on page 38.

The Board has ultimate responsibility for the Group’s confidential
reporting facility and there is now a process in place for
promptly escalating significant reports. The Remuneration
Committee is responsible for reviewing workforce remuneration
and related policies, along with the alignment of incentives and
culture. Read more about the Remuneration Committee’s work
in its review of the year on page 80.

Division of responsibilities
The Board has established the Company purpose, values
and strategy. It promotes Ted Baker’s culture and oversees its
implementation across the business, while promoting the success
of the Group for the benefit of its members and stakeholders.

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BOARD COMPOSITION

BOARD BALANCE AND INDEPENDENCE

The Board currently comprises the Chair, Chief Executive
Officer, Chief Financial Officer, a Senior Independent
Director, two independent Non-Executive Directors and one
other Non-Executive Director. Biographies of these Directors
and resignations from the Board in the period appear on
pages 58-59 and 61.

The Board is confident that its current membership and recent
appointments offer a good balance of skills, experience,
independence and knowledge that mean it can discharge
its responsibilities effectively. Further details of each Director’s
skills and experience can be found on pages 58-59.
The Board meets regularly and allows sufficient time for all
Directors present to express an opinion. The Non-Executive
Directors also meet with the Chief Executive Officer.

CHAIR

The Chair, John Barton, leads the Board and is responsible
for its overall effectiveness. John was considered independent
on appointment, continues to demonstrate objective judgement
and promotes a culture of openness and constructive debate.
He works with the Chief Executive Officer and the Company
Secretary to ensure that all Directors receive timely and clear
information. Following his appointment, the Chair has worked
closely with the Senior Independent Director and the
Non-Executive Directors.

CHIEF EXECUTIVE OFFICER

Rachel Osborne is responsible for the day-to-day leadership
of the business. She is supported by the Executive Team.
The Chair and Chief Executive Officer work together to set
the Board’s agenda and make sure appropriate discussions
take place between Board meetings.

CHIEF FINANCIAL OFFICER

The Chief Financial Officer, David Wolffe, is responsible for
the financial governance of the Group and business, providing
regular and timely information and reports to the Board so they
can understand the business’s performance and performance
to plans. He reports to the Chief Executive Officer.

SENIOR INDEPENDENT DIRECTOR

The Senior Independent Director, Helena Feltham, acts as
a sounding board for the Chair and can act as an intermediary
for the other Directors and shareholders when required. She
also leads the other Non-Executive Directors in the annual
performance evaluation of the Chair. She offers an alternative
point of contact for shareholders on matters where the usual
channels of communication are judged to be inappropriate.
She is also the Non-Executive Director for workforce
engagement and you can find more details about
engagement activities during the year on pages 35-38.

There is a clear division of responsibilities between the
leadership of the Board and executive leadership of the
business. The roles of Chair, Chief Executive Officer, Chief
Financial Officer and Senior Independent Director are
clearly separated and set out in writing. Their division of
responsibilities, along with matters reserved for the Board and
the terms of reference for each principal Committee, ensures
no individual has unfettered decision-making powers.

All Non-Executive Directors are considered independent in
accordance with Provision 10 of the 2018 Code, save for
Colin La Fontaine Jackson. Details of the Board’s composition,
and the biographical details for each of the Directors and the
skills and expertise they bring to the Board, can be found
on pages 58-59. At its February 2021 meeting the Board
considered the independence of each Non-Executive Director
and determined that all remain independent of management
and free from any relationship that could interfere with their
judgement, save for Colin La Fontaine Jackson.

The Non-Executive Directors bring an external perspective
to Board discussion. The Company benefits from the broad
range of skills and experience which they bring from different
businesses and fields, including the financial, retail, marketing
and other business sectors. They offer specialist advice,
constructive challenge and strategic guidance to the Chief
Executive Officer and wider Executive Team, as well as holding
them to account. Throughout the year, they have helped to
shape the Group’s strategy, scrutinised the performance of
management, agreed goals and objectives and monitored
the Group’s risk profile and reporting of performance.

For the purposes of the 2018 Code, the Board considers
Non-Executive Directors Andrew Jennings, Helena Feltham and
Jon Kempster to be independent. We review this status each year
and the Board keeps a record of the terms of service of the Chair
and Non-Executive Directors to ensure they continue to meet the
requirements of the 2018 Code. The Chair was considered
independent on appointment. Colin La Fontaine Jackson was
appointed a director as a representative of Ray Kelvin, the Founder,
in accordance with the terms of a relationship agreement between
Ray and the Company. Colin is not considered independent.

BOARD PROCESSES AND THE ROLE OF THE
COMPANY SECRETARY

The Company Secretary ensures the Board receives appropriate
and timely information and offers advice and support to the
Chair, Board and senior management on regulatory and
governance matters. All Directors have access to the Board
portal, which is used to distribute Board and Committee
materials, governance materials and analysts’ notes. Board
meetings are scheduled well in advance and when meetings
need to be called at short notice or additional meetings are
needed, as was required throughout the year, efforts are made to
find suitable times when all Directors can attend. When this is not
possible, Directors have access to the briefing materials and
minutes of all meetings on the Board portal. Directors can also
discuss any agenda item with the Chair, Chief Executive Officer
or relevant Committee Chair at any other time. All Directors have
direct access to the advice and services of the Company
Secretary. Directors may also obtain independent professional
advice when needed at the Company’s expense.

66 Ted Baker plc Annual Report and Accounts 2021

TIME COMMITMENT

AUDIT, RISK AND INTERNAL CONTROL

The letters of appointment for the Chair and Non-Executive
Directors state the expected time commitment needed to fulfil
their roles. The Chair and Non-Executive Directors are
expected to set aside sufficient time to prepare for meetings.
Directors commit to the time they need to for preparing and
attending Board meetings and any additional ad hoc meetings
that take place during the year. The Board is satisfied that all
Directors continue to devote sufficient time to discharge their
duties effectively. This year they all spent a considerable
amount of additional time in Board and Committee meetings
to review, and deal with, the critical issues the Group faced.

APPOINTMENT AND REAPPOINTMENT
OF DIRECTORS

There is a formal, rigorous and transparent procedure for
the appointment of new Directors. The process for new
appointments is led by the Nominations Committee.

All Directors will stand for reappointment at the forthcoming
Annual General Meeting (the ‘2021 AGM’). The Notice of
2021 AGM will include a biography of each Director setting
out the skills they bring to Ted Baker and why their contribution
is, and continues to be, important to the long-term success
of the Group. More information about the process for the
appointment of Non-Executive Directors can be found in the
Nominations Committee Report on pages 76-79.

SUCCESSION PLANNING AND DIVERSITY

The Nominations Committee is responsible for developing
and overseeing succession plans for the Board and senior
management. As part of this review, it considers the length
of service of each Director. The Committee also considers
their skills and experience and maintains a skills matrix.
Appointments and succession plans are based on merit and
objective criteria. They are intended to promote diversity and
inclusivity. To find out more about the review of succession
planning and diversity and inclusion, please see the
Nominations Committee Report on page 76.

The Audit & Risk Committee Report gives a detailed overview
of the Committee’s activities on pages 72-75. Further information
about the Group’s approach to risk management, including
the management of principal and emerging risks,
is on pages 48-53.

REMUNERATION

You can read about the work of the Remuneration Committee
and our approach in the Remuneration Committee Report on
pages 80-93.

Board operation
The Board meets regularly throughout the year. This year the
Board held regular additional meetings to deal with the issues
it faced, including the sale and lease back of the head office,
equity raise, refinance, cost management and Covid-19.
With the support of the Board Committees and the Executive
Team, we consider all issues relating to Ted Baker’s purpose,
values and the strategy, direction and future development of the
Group. The Board has a schedule of matters for decision that
is regularly updated. These include decisions on the Group’s
strategy, financial budgets, major capital expenditure and
transactions, appointment of territorial and product licence
partners, store openings, dividend policy, Group bonus and
risk profile. The requirement for Board approval on these
matters is understood and a new delegation of authority has
been communicated throughout the Group. The Non-Executive
Directors also have sufficient time to meet with the Chair
separately during the year. In addition, the Non-Executive
Directors meet without the Chair present to appraise the
Chair’s performance.

Operational decision making, operational performance
and the formulation of strategic proposals to the Board are
controlled by the Group’s Executive Team which meets
regularly throughout the year together with relevant heads of
departments as necessary. Details of the Executive Team are
set out on pages 60-61.

The Board and the Committee structure is set out below:

Ted Baker plc
Board of Directors

CEO

Disclosure
Committee

Nominations
Committee

Remuneration
Committee

Audit & Risk
Committee

Executive Team

Management Risk
Committee

Investment
Committee

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The Company maintains an appropriate level of Director
and Officer liability insurance cover. Through the Articles of
Association and Directors’ terms of appointment, it has agreed
to indemnify the Directors against certain liabilities to third
parties and costs and expenses incurred as a result of holding
office as a Director. Indemnities are in place for Directors who
ceased to be in office during the year. Apart from the indemnity
provisions in the Company’s Articles of Association and in the
Directors’ terms of appointment (which were in force for the
benefit of all Directors in office throughout the period and
remain in force at the date of this report), there are no
qualifying third-party indemnity provisions in force.

Board evaluation
In the previous financial year, the Board engaged in an
externally facilitated evaluation of the Board and Committees’
effectiveness. They were supported by Dominic Schofield of
Korn Ferry, an independent external adviser who also provided
recruitment consultancy services in that financial period but who
has no other connection to the Company or with any individual
Director. Following the changes to the Board that took place
during this financial year, we did an internal Board evaluation.
This canvassed the views of the Board Directors as well as the
Executive Committee on the Board’s performance. The results
of this internal evaluation were collated by the Company
Secretary and shared by the Chair with the Board of Directors
and the Chief Executive Officer with the Executive Committee.

The internal evaluation gave us an opportunity to review the
implementation of the recommendations of the Korn Ferry
review in the prior year, and also for the Directors to provide
feedback on all areas of operation across the Board, its
Committees and the Directors’ interaction with the wider Group.
Key feedback suggested further development of the interaction
between the Board, the Executive Committee and senior
leadership team, along with succession planning and inclusivity.

Code compliance
A summary of the critical and key governance issues can be found below with references to other relevant sections of the report.

INDEPENDENCE

Most of the Board are independent Non-Executive Directors. The Chair was independent on
appointment and the Committee memberships comply with the Code. More information about
the Directors can be found on pages 58-59.

SENIOR INDEPENDENT DIRECTOR The Senior Independent Director is Helena Feltham.

ACCOUNTABILITY AND ELECTION Details of the separation of responsibilities and accountability of the Board can be found on

page 66.

EVALUATION

ATTENDANCE

COMMITTEE CHAIR EXPERIENCE

An internal Board evaluation took place during the period, building on the external evaluation
in the prior period. Details can be found on page 68.

Details of attendance records can be found on page 71. The Directors have attended to an
acceptable degree.

The Audit & Risk Committee Chair meets the requirements of recent and relevant financial
experience. The Remuneration Committee Chair and Nominations Committee Chair meet
the experience requirement. No Committee Chair was involved in their own appointment.

GOVERNANCE FRAMEWORK

A clear framework is in place and kept under review.

AUDIT TENURE

BDO LLP were appointed as auditors in the period, following a tender process managed by
the Audit & Risk Committee, with a final recommendation to the Board. The lead audit partner
is Sophie Michael.

NON-AUDIT POLICY

Details of the non-audit fees and policy can be found on page 74.

AUDITOR APPOINTMENT

The appointment of our external auditor is disclosed on our website.

INTERNAL AUDIT

CULTURE

PERFORMANCE-RELATED PAY

Details of how the Group runs and manages its internal audit activities can be found in the
Audit & Risk Committee Report on page 75.

The Board has reviewed Ted Baker’s culture, values and mission during the year. Details can be
found on pages 35-38.

Performance-related pay is an important element of reward, which is largely achieved through
share awards. There is also an annual incentive scheme. Full details can be found in the
Remuneration Committee Report on pages 80-93.

WORKFORCE ENGAGEMENT

Helena Feltham is the Director for workforce engagement. Details of her activities during the year
can be found on pages 35-38.

DIVERSITY AND INCLUSION

Information about the diversity of the Board can be found on page 79. Further information about
the senior leadership can be found on pages 60-61.

68 Ted Baker plc Annual Report and Accounts 2021

Board activity in FY21
The year was dominated and impacted by Covid-19 and
corporate transactions, including the refinance, equity raise
and sale and lease back of our head office. As a result, there
were a significantly higher number of additional meetings than
in previous years to allow the Board to be actively and closely
engaged in these critical issues. Most meetings were held
remotely due to Covid-19 restrictions in place during the
financial year and all Directors had access to appropriate
equipment so they could fully engaged with the business.
Board papers are available electronically via a Board portal.

The regular scheduled Board meetings follow a carefully
tailored agenda, agreed in advance by the Chair, Chief
Executive Officer and Company Secretary ahead of each
meeting. A typical meeting will involve a review of the previous
minutes and actions, reports on current trading and financial
performance from the Chief Executive Officer and Chief
Financial Officer. The Board also receives a review and
update on the progress of the strategic transformation
programme. They also get detailed presentations on areas
of particular strategic importance, together with relevant
governance and legal updates. Executive Committee members
attend to provide detailed updates on specific topics. Details
of the Directors’ attendance at the scheduled meetings that
took place during the year can be found on page 71.
The Board had ten scheduled meetings for the year but
there were no significant additional Board meetings.

COMPANY PERFORMANCE

ɫ The Board reviewed trading updates at each Board meeting
with analysis of the performance. In a year dominated by
the impact of Covid-19 a significant amount of time was
spent discussing action plans to ensure the safety of our
customers and team members, along with the impact on
trade and necessary actions needed to protect the business.

FINANCIAL UPDATES

ɫ The year’s financials were affected by the events outlined
above. The Board was given regular updates on the
financial impact to the business throughout the year.

ɫ In addition, regular events including agreeing the budget
for the year were clearly disrupted by the the pandemic.

ɫ Performance against plan and against budget figures was

shared at each Board meeting.

ɫ Following the inventory investigation the Board continued to
review and action a full review of controls to ensure tighter
approval processes and controls. This was led by the Audit
& Risk Committee, who reported to the Board and
discussed details at Board meetings.

ɫ Cash flow and dividend decisions were discussed in detail,
in particular the decision not to declare a final dividend for
the prior year.

ɫ The Board reviewed procurement costs of goods not for
resale and costs savings where identified, along with
actions attached to this and the agreed recruitment to
support this activity.

ɫ The Board had regular updates from the Audit & Risk
Committee. In particular they addressed the growing
concern and risk of a no-deal Brexit.

ɫ The Board is updated at each meeting about any health
and safety incidents and they discuss any relevant issues.
This year, the discussions and agreements were about
measures to limit the impact of Covid-19 for our
team members.

ɫ The Board carried out a refinance of the Group bank
facilities during the year and approved the proposed
new arrangements.

ɫ The Board carefully considered plans for Ted’s Growth

COVID-19

The Board had regular updates on all aspects of the effects
of Covid-19 on the business throughout the year and on plans
put in place to address issues arising from it where possible
and practical. Issues they reviewed and considered included
agreeing new ways of working, managing stock and supply
chain issues, cash management, team member support,
establishing a crisis team, disclosure requirements and
government support.

Formula and the associated actions for the transformation
strategy. While this plan was under ongoing review,
a strategy day meeting looked at the strategy and actions
in detail. We were able to hold this in person using a large
meeting space at an adviser’s office. The meeting took
a deep dive into the strategy with a discussion that included
both the Executive Committee and the Board.

ɫ The Chief Customer Officer attended the Board meetings

to update the Board and discussed proposals to review the
brand values and to obtain customer insight analysis. This
allowed the Board to consider and agree the Group’s
values and mission, and to review our product development
plans to become better informed about the Group’s current
and target customers.

ɫ The Group Trading Director attended Board meetings

in the year to offer further insight and analysis of trading
performance and risks against agreed plans.

ɫ The Global Creative Director attended the Board to inform
and discuss our product strategy plans and, in particular,
how the product ranges would be refreshed, energised,
expanded and launched.

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BALANCE SHEET

At the same time as Covid-19 affected the global business and
in light of ongoing challenges to the balance sheet, the Board
did a structural review. This included a lengthy and detailed
review of a proposal to sell the freehold head office building
in King’s Cross to the owner of the adjoining buildings.
The proposal would release substantial cash to the business,
which the Board considered in the best interests of the Group.
The proposal also had a short lease back of the head office
with an option to lease new offices from the adjacent owner
in a new office building. A circular sent to shareholders on
1 June 2020 contained full details of the proposal. The Board
also considered proposals to issue new equity to support the
business’s balance sheet, along with a refinance of the Group
lender facilities, with the support of external advisers. Detailed
consideration was given to the equity raise, the structure of the
raise and the quantum of the raise, together with appropriate
bank lending facilities. These activities required detailed
consideration of the best interests of the Group as a whole.
Detailed documentation was reviewed and agreed,
shareholders were engaged to gauge their support and the
plans were finalised with all advisers and relevant stakeholders.

COMMITTEE UPDATES

The chairs of the Audit & Risk, Remuneration and Nominations
Committees updated the Board on the proceedings of their
meetings at each Board meeting. These updates included key
discussion points and areas of particular concern, including
reviews of the remuneration policy, key recruitments undertaken
during the year and any investigations carried out.

GOVERNANCE AND LEGAL

ɫ The Board had training on Directors’ duties, prospectus

liability and continuing obligations.

ɫ Board succession and diversity were discussed, considered

and actions agreed.

ɫ The Annual Report and Accounts, Notice of AGM, Modern
Slavery Statement, Gender Pay Gap and the half and full
year results announcements were reviewed and approved.

ɫ The Board reviewed and approved matters raised at the
Annual General Meeting. It then received shareholder
approval for not posting the accounts to all shareholders
unless requested.

ɫ The Board carefully considered a proposed delegation of
authority to the leadership team and agreed a refreshed
document that sets out the division of Board responsibilities.

ɫ Board development continued, including time with the

Executive Team and other senior management in the Group
to give them greater involvement in, and understanding of,
the business.

70 Ted Baker plc Annual Report and Accounts 2021

COMMUNICATION WITH SHAREHOLDERS

The Group is committed to communicating effectively with all
its shareholders. The full Annual Report and Accounts are sent
to all shareholders as digital or hard copy, depending on their
preference. Further copies are sent out to other people with
a potential interest in the Group’s performance.

Led by the Chair and Chief Executive Officer, the Group seeks
to build on a mutual understanding of objectives between the
Company and its institutional shareholders. During the year the
Company met with its larger shareholders and prospective
shareholders to discuss the equity raise in June 2020. The
Company issued a prospectus with a rationale for the equity
raise and the proposed sale and lease back of the head office.
These resolutions were approved by the shareholders at
a General Meeting on 21 July 2020. The Company 2020
AGM was held without shareholders because of government
restrictions in place at the time. The Board looks forward to
welcoming shareholders to the 2021 AGM to the extent it is
possible to do so.

As announced on 1 September 2020, the Board entered into
a new relationship agreement with the founder of Ted Baker,
Ray Kelvin. They also agreed to the appointment of a Board
representative, subject to a continuing shareholding of at least
10%. The Board continues to welcome a dialogue with Ray.
The Board will also continue to have an active dialogue with
stakeholders and to communicate with general presentations
after the interim and preliminary results. They will meet
shareholders and potential investors to discuss long-term issues
and to gather feedback. And they will use our investor relations
programme to communicate regularly throughout the year.
All shareholders can access these presentations, as well
as the Annual Report and Accounts and other information
about the Company, through the investor relations website
www.tedbakerplc.com. Shareholders can also attend the
Company’s Annual General Meeting, where they can ask
questions about the Company and its operations.

The Chair and Chief Executive Officer share the views of
shareholders with the Non-Executive Directors, who also
get independent feedback from investor meetings.

CONFLICTS OF INTEREST

The Company’s Articles of Association take account of certain
provisions of the Companies Act 2006 relating to Directors’
conflicts of interest. These provisions allow the Board to
consider and, if thought fit, to authorise situations where
a Director has an interest that conflicts, or may possibly
conflict, with the interests of the Company. The Board has
adopted procedures for the approval of such conflicts. The
Board’s powers to authorise conflicts are operating effectively
and the procedures are being followed. During the period, no
situational conflicts of interest were disclosed by the Directors.

BOARD AND COMMITTEE ATTENDANCE

The table below shows the number of Board and Committee
meetings held during the period and the attendance record of
each Director.

Board
meetings

Audit & Risk
Committee

Remuneration
Committee

Nominations
Committee

Number of meetings held

John Barton1

Rachel Osborne

David Wolffe2

Andrew Jennings6

Helena Feltham

Jon Kempster

Colin La Fontaine Jackson3

Sharon Baylay4

Jennifer Roebuck5

–

1 John Barton was appointed to the Board on 1 July 2020 and has attended

all Board meetings since his appointment.

2 David Wolffe was appointed to the Board on 18 May 2020.

3 Colin La Fontaine Jackson was appointed to the Board on

1 September 2020.

4 Sharon Baylay ceased to be a Director on 21 July 2020.

5 Jennifer Roebuck resigned and left the Board on 31 March 2020.

6 Andrew Jennings was absent from some meetings due to illness.

The following team members were also invited to attend Board
meetings during the year:

Name

Jennifer Roebuck

Tikki Godley

Peter Collyer

Leon Shepherd

Role

Chief Customer Officer

Group Trading Director

Chief People Officer

Chief Information Officer

Anthony Cuthbertson

Global Creative Director

Ari Hoffman

CEO – North America

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Safeguarding integrity, controls and
compliance in a time of change
The Audit & Risk Committee monitors the integrity of Ted Baker’s
financial statements and reporting responsibilities and maintains its
internal controls and compliance procedures. Clearly this is vital to
good governance and even more important following the challenges
of the previous year and the big changes that have taken place in the
business this year.

As I reported last year, our immediate priority was to draw
a line under the misstatement of stock for the year end FY20.
This, together with the refinancing of the Group bank facilities,
the sale and lease back of the Ugly Brown Building and
the successful equity raise, created a solid foundation for
Rachel and the team to kick off the transformation programme.
You can read about this in detail on pages 1-9.

As explained in note 1 to the financial statements, a number of
adjustments to inventory values were recorded in the financial
statements for the 52 weeks ended 25 January 2020, including
amendments to inventory which had been overstated at the
previous year end. BDO LLP was appointed auditor in July
2020 and its first year of audit is the 53-week period ended
30 January 2021. Following BDO LLP’s assessment of the prior
year comparatives for the purpose of the 2021 audit, BDO
concluded that it was not possible to determine the impact of
these adjustments to inventory values at 26 January 2019, and
consequently on retained profit at that date, and therefore on
the income and expenditure and calculated cash flows for
the 52-week period ended 25 January 2020. As a result,
BDO has qualified its opinion on the comparative figures
shown in the financial statements related to that period.

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72 Ted Baker plc Annual Report and Accounts 2021

Where we have focused our efforts
It was a busy year for the Committee, with 11 meetings.
These focused on the key areas outlined below. We have
been supported by meetings with senior managers and our
external auditors, and informed by regular reviews of Board
papers and financial information.

1. Controls remediation programme
The improvement programme recommended by Deloitte
following the stock misstatement is on track. We will continue
and complete this in FY22. Some areas need input from IT,
but the demands of the transformation strategy have prevented
this. This has slowed down some parts of the programme, but
we will resolve these issues as we go.

2. Risk management
At the start of the year, the management Risk Committee was
dormant. There was also an urgent need to reinvigorate the
Group’s risk planning. As outlined above, the new management
Risk Committee came together in the second half of the year.
We compensated for this lack by focusing on critical areas
without the back up of a management Risk Committee and its
activities. As a result, with more frequent Audit & Risk Committee
meetings and collaboration with the CFO and the finance
team, we could report positive progress to the wider Board.
We are also confident that the risk management process
adopted by the Board worked well to identify risks and
actions required.

Internal audit

3.
With our internal function suspended, no reviews took place
last year.

4. Tax
We considered a range of tax matters including the potential
impact of any tax matters on the Group’s financial statements,
the Group’s tax strategy and the impact of Brexit on this.

5. External risk factors
The Committee is responsible for reviewing the effectiveness
of the Group’s risk management system and internal controls.
You can read about this in detail in the Principal Risks and
Uncertainties section on pages 50-53.

6. Brexit
We considered the possible impact of Brexit, evaluating
analysis of the potential risks by our Brexit working group.
You will find details of the effect of Brexit in David Wolffe’s
Financial review.

No-one imagined the impact the pandemic would have on
Ted Baker’s trading performance through the whole year.
We were concerned that the additional workload and pressing
trading issues would delay vital improvements to the controls
environment and the reconstitution of the management Risk
Committee. David Wolffe recommended we invite Deloitte LLP
to support us and manage the project, and they have helped
keep both projects on track. Reporting to the Audit & Risk
Committee, the management Risk Committee is made up of
people from around the business who assess and consider the
ongoing business risks and new risks, mitigants and likelihood of
various risks arising. The management Risk Committee had not
been active in the prior year due to the critical and high risk
events that the Board addressed during the year and discussed
in the many Board and Committee meetings.

Successfully rebuilding the management Risk Committee has
involved many people across the business. It is now up and
running again, with an increased membership designed to
give a sense of ownership to people from different disciplines
across the Group. We have also made improvements to the
controls environment. This, along with our strengthened finance
team, means the Board now receives more timely and accurate
information. And BDO, our new external auditors, have proved
themselves invaluable, as their views are not clouded by
past events.

As always, there is room for improvement, and we will continue
to focus on these important areas in the coming year.

AUDIT & RISK COMMITTEE MEMBERSHIP

Membership of the Audit & Risk Committee has been consistent
through the year, with Helena Feltham and Andrew Jennings
making valuable contributions. As many topics we discuss
touch on the wider transformation strategy, the Chair, Chief
Executive Officer and Chief Financial Officer have open
invitations to our meetings. I would like to thank both Helena
and Andrew for their insights and hard work this year.

Part of the annual review of the Audit & Risk Committee’s
effectiveness is based on the expertise of its members.
The Board is confident we have the right mix of recent and
relevant financial experience and retail sector competence.
They are confident that we are independent, and we have
the necessary depth of financial and commercial experience
across various industries.

To see the Audit & Risk Committee’s terms of reference please
visit www.tedbakerplc.com.

Ted Baker plc Annual Report and Accounts 2021

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Significant issues
The Committee reviewed management and external auditor
reports on the significant issues found in the financial statements.
These included the carrying value of inventory, the carrying
value of retail fixed assets, the going concern basis of
preparation and the overall controls environment, particularly
management’s ability to override. We discussed all these issues
with the management team and challenged them on each.
We also reviewed them with the external auditors at the end
of the financial statements audit for the period.

1) Carrying value of inventory
Inventory is carried in the financial statements at the lower of
cost and net realisable value. Adequate stock provision was
a specific focus at the end of this year. The pandemic and
multiple lockdowns resulted in store closures, which in turn
had an impact on the sale through of inventory leading
to a higher level of re-seasoned inventory.

2) Carrying value of retail fixed assets (being leasehold
improvements and fixtures and fittings and the right of use asset)
We select retail fixed assets for impairment testing on the basis
of current and projected performance, with growth assumptions
based on Directors’ knowledge and experience. As a result
of the pandemic we reviewed more stores than normal.

3) Going concern
Ted Baker’s balance sheet has been strengthened and a net
cash position maintained through the year thanks to the
refinancing of our bank facilities and the equity raise. The
Group has built a forecast that includes many key assumptions.
These include the end of the pandemic across the many
territories we operate in and how we anticipate the respective
economies will react. From this the Group has sufficient access
to finance to manage all possible scenarios.

4) Controls environment
The management team confirmed it was not aware of any
material misstatements or immaterial misstatements made
intentionally to tell a particular story. They also gave us
confidence that the year end accounts preparation and
review of the controls environment is adequate and will
continue to improve.

The Committee reviewed and challenged the management’s
reports and presentations, consulting the external auditors
when necessary. As a result, we are satisfied the financial
statements address the critical judgements and key estimates
correctly (both in respect to the amounts reported and the
disclosures). We are also satisfied that the significant
assumptions used to determine asset values and liabilities
have been scrutinised and challenged and are suitably robust.

Tax governance framework
The Chief Financial Officer is responsible for the Group’s tax
policy, which is implemented with assistance from the senior
finance and Group tax team. We review this on an ongoing
basis as part of our regular financial planning cycle. The
Group’s tax status is also reported regularly to the Board
and Audit & Risk Committee. The Committee is responsible
for monitoring all significant tax matters including the Group’s
tax policy.

In line with the Finance Act 2016, Ted Baker has published
details of the Group’s tax strategy in relation to UK taxation
on its website. www.tedbakerplc.com/investor-relations/
tax-strategy.

External audit
Every year the Audit & Risk Committee considers the
reappointment of the external auditors. We also assess
their independence on an ongoing basis and oversee the
Group’s relationship with the external auditors. We make
recommendations to the Board on their appointment,
reappointment and removal, along with approving their
remuneration and terms of engagement.

An audit tender followed the finalisation of our FY20 accounts
and the decision not to reappoint KPMG. The participating
firms made presentations to the Audit & Risk Committee and
members of the Executive Team. As a result, BDO were
appointed as Group Auditor on 21 July 2020.

BDO did an interim review to get a full understanding of
the Group and the major issues. The team’s involvement has
been very positive and we look forward to benefiting from
their experience, and knowledge in our Group reporting
to stakeholders.

The Board and Audit & Risk Committee also consider
our external auditors as suppliers of non-audit services
when required.

Our formal policy on the supply of non-audit services by our
external auditors means they may only deliver these services
on condition that their advice does not conflict with their
statutory responsibilities and ethical guidance and FRC
feedback. The Audit & Risk Committee Chair’s pre-approval
is required before the Company uses non-audit services.
Where fees are expected to be above £50,000, approval is
required from the Audit & Risk Committee Chair and one other
member of the Committee. Aggregate spend is also reviewed
on an annual basis. You can find details of the external
auditors’ remuneration for audit and non-audit fees in Note 3
to the financial statements.

74 Ted Baker plc Annual Report and Accounts 2021

“ The management
Risk Committee is now
up and running again,
with an increased
membership designed
to give a sense of
ownership to people
from different disciplines
across the Group.”

External audit continued
The effectiveness of the external auditors was based on
a review of:

ɫ Their fulfilment of the agreed audit plan and variations from it

ɫ Reports highlighting the major issues that came up in the audit

ɫ Feedback from the Company on the performance of each

assigned audit team.

The Audit & Risk Committee held meetings with the external
auditors before each Committee meeting to review key issues
around their scope and responsibilities. This oversight of the
external audit process reviewed the following:

ɫ The terms, areas of responsibility, associated duties and
scope of the audit as set out in BDO’s engagement letter
for the forthcoming year

ɫ BDO’s overall work plan for the forthcoming year

ɫ Their fee proposal

ɫ The major issues that came up in the course of the audit

and how they were resolved

ɫ Key accounting and audit judgements

ɫ The level of errors identified during the audit

ɫ Recommendations made by BDO in their management

letters and the adequacy of our management’s response.

The Audit & Risk Committee notes the final Order of the
Competition and Markets Authority and the EU regulation
on audit rotation. We will ensure Ted Baker complies with these
requirements when considering the timing of the next tender for
our external audit.

Internal audit
The Audit & Risk Committee also oversees the Group’s internal
audit function. This includes its role, mandate and audit plan.

Last year we stopped outsourcing our internal audit function to
PWC. Deloitte has supported us in our programme to improve
the overall controls environment as outlined above. Structural
changes and progress on the transformation strategy have seen
an improvement to the controls environment. These changes
included relocating most of our US finance resource to
a shared service centre in the UK. Some senior commercial
finance resource remains to support the US management team
in New York.

With these foundations in place, we have begun the search
for a Head of Internal Audit to restart the function in FY22.
The successful candidate will prepare a programme with the
support of external resource to make the internal audit function
a fundamental part of the controls environment. We will also
involve Ted Baker team members seconded for specific
projects as part of their development. Their involvement will be
reliant on making sure their objectivity and independence are
not compromised.

Once we have the right person on board, we can look
forward to a new and sharply focused resource, which will
see an improvement to the overall controls environment.

The Audit & Risk Committee will approve the scope of the
internal audit function. This means the internal audit team can
stay on top of new developments the Group encounters, while
the Committee can challenge and support its conclusions.
Our aim is for the internal audit function to be assessed not only
by the risks it identifies but also how it proposes to remedy them.

Whistle blowing
The Audit & Risk Committee is responsible for reviewing how
Ted Baker responds to whistle blowers’ allegations and how
team members can raise concerns in confidence. Whistle
blowers can choose to remain anonymous if they wish. All
reports of allegations or concerns will be sent to the Group’s
General Counsel and a member of the non-Executive Team.
We hope this will encourage members of team members to
speak out with no fear of reprisal.

Jon Kempster
Chair of the Audit & Risk Committee
13 June 2021

Ted Baker plc Annual Report and Accounts 2021

GOVERNANCEREPORTt Supporting Ted Baker’s transformation strategy
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People have been at the heart of many of the events in this most difficult
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year, which has seen much change from top to bottom of the business.
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The Nominations Committee has worked closely with the Board and senior
management team to support Ted Baker’s transformation strategy, focusing on
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the fundamental strengthening of the Group’s leadership and Executive Team
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and creating a well-structured Board with a diversity of expertise and skills.
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It is vital the Company has the right leadership team in place,
who can set the pace and be agile while focusing on key
things – our people, product and brand. We take a holistic
approach, making sure we take into account the views of
our wider stakeholders including our customers, team members
and shareholders.

NOMINATIONS COMMITTEE MEMBERSHIP
AND ACTIVITIES

I chair the Committee, with Non-Executive Directors Andrew
Jennings and Jon Kempster as members. Members of the
Executive Team are invited to join us when appropriate.
Our job is to establish and implement a framework for
appointments of Non-Executive Directors, Executive Team,
and senior management. The Committee also oversees the
development of a diverse pipeline for succession to the Board
and senior management roles. In this busier-than-usual year,
we held ten formal meetings, with regular updates between.
I would like to thank Andrew and Jon for their invaluable
support and input over the year.

REVIEW OF THE YEAR FY21

This year saw the completion of a much needed and
substantial refresh of the Board and senior management team,
which sets Ted Baker up for the future. As a result, we now have
a strong leadership team in place, with the breadth of skills,
experience and perspectives to make our transformation
strategy come to life.

We were delighted to welcome Rachel Osborne as Chief
Executive Officer, John Barton as new Chair, David Wolffe
as Chief Financial Officer and Colin La Fontaine Jackson’s
appointment to the Board as a Nominee Director. And we
were excited to make three key appointments to the senior
management team, including Jennifer Roebuck as Chief
Customer Officer, Anthony Cuthbertson as Global Creative
Director and Helen Costello as Group Commercial and
Business Development Director.

These new appointments create a solid foundation from which
to rebuild trust in the brand and to take the business forward
in a positive way. Each of them has already made a huge
difference to the business and we look forward to supporting
them as our transformation strategy unfolds.

Following the Company Secretarial team’s internal Board
evaluation, we will be focusing on ways to refine our approach
to diversity and inclusion to strengthen the Board further.

Impact of Covid-19 on our people
There is no doubt that the uncertainty in the business and the
wider world has had a deep impact on our people. At the
peak of lockdown in spring 2020, over 2,600 team members
were furloughed, from head offices to warehouses and stores.
We then had to take the very difficult decision to make 953
roles redundant. For more details, see page 35. I would like
to thank everyone across the business for their kindness and
patience through this difficult process. Through this, I have
worked with Peter Collyer, our Chief People Officer and his
team, to build stronger channels of communication between
our people and the Board. This has helped rebuild trust and the
brand internally.

Succession planning
The Committee has worked with Rachel Osborne and Chief
People Officer Peter Collyer to put the right structures
and succession plans in place for the short term to stabilise
the business, with an eye to the future to achieve Ted Baker’s
three-year transformation strategy. These succession plans
are designed in line with the Committee’s terms of reference
(see page 79) and the Group’s Equality, Diversity and

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76 Ted Baker plc Annual Report and Accounts 2021

Discrimination Policy. Both these will guide us as we continue
to build a diverse succession pipeline for the Company.

Training for a robust succession pipeline
We believe the best way to support internal progression to
senior management and Board positions is through developing
training and resources. This lets us create a robust talent pipeline
that promotes continuity in the Group’s growth and business
culture. With this in mind, we have improved our People
Team’s capabilities in this area and have invested in relevant
progressive technology to allow easy access to tools and
support. See page 37 for more details.

Channelling team members’ feedback
As mentioned above, we have focused on building better
channels of communication with our people at every level.
Following feedback from independent employee listening
groups in August 2019, we established an elected UK
people’s forum – the Fresh Eyes Forum. This has been vital in
opening up two-way communications with the Board and
leadership through the changes and uncertainty of 2020.
We look forward to seeing the fruits of this as Ted Baker
develops over the coming years.

BOARD APPOINTMENTS FY21

The successful refresh of the Board means Ted Baker can focus
on the future of the business, built on solid foundations and
strong governance. There are currently seven Board members,
including the Chair, Chief Executive Officer, Chief Financial
Officer, a Senior Independent Director, two independent
Non-Executive Directors, and a Nominee Non-Executive
Director. I have outlined the details of the key changes to the
Board and senior management here:

New CEO appointment
Following the resignation of CEO Lindsay Page on
10 December 2019, Rachel Osborne was appointed Acting
Chief Executive Officer. The Committee worked with Sam Allen
Associates in the search for a permanent Chief Executive
Officer, who has no other connection to the Company or with
any individual Director. After a thorough, competitive process,
the Board was delighted to appoint Rachel as CEO on
30 March 2020.

NED to senior management
On 31 March 2020, Jennifer Roebuck stepped down from her
Non-Executive Director position to become Chief Customer
Officer as part of the senior management team. She brings her
expertise and understanding of the Company to the role from
her time on the Board.

New NED Chair appointment
Following the resignation of David Bernstein, former Executive
Chair of the Board, the Committee worked with Korn Ferry
consultancy to find a permanent independent Non-Executive
Chair of the Board. The former chair was not involved in the
selection or appointment of their successor.

The Board announced the appointment of John Barton as the new
Chair on 22 April 2020. He joined Ted Baker on 1 July 2020,
with Sharon Baylay continuing in her role as Acting Chair until that
time. Sharon did not seek re-election to the Board at the AGM.
We would like to thank her for her important contribution in
keeping Ted Baker on an even keel through uncertain times
and her support in finding the right Chair for the Company.

Appointment of new Chief Financial Officer
Following Rachel Osborne’s appointment to Chief Executive
Officer, the Committee began the search for a permanent
Chief Financial Officer. Search agency Ridgeway Partners,
who have no other connection to the Company or to any
individual Director, supported us. As a result, the Board was
delighted to appoint David Wolffe as Chief Financial Officer
on 18 May 2020.

Nominee Director Appointment
On 1 September 2020, Colin La Fontaine Jackson was
appointed to the Board as a Nominee Director for Ray Kelvin,
Ted Baker’s founder and a major shareholder of Ted Baker. The
normal process for appointing NEDs was followed – interviews,
referencing, candidate checks and shareholder consultation.

Ray and the Company have signed a new relationship
agreement that maintains the benefits of access to Ray’s unique
brand experience and insight. At the same time, it introduces
clear guidelines to maintain Board independence and to
ensure the interests of shareholders are prioritised and
protected. It also formalises Ray’s relationship with the
Company through the Board of Directors.

As a result of these directorate changes throughout the year,
we have one NED member, Colin La Fontaine Jackson, who
is not independent. All the other NEDs and the Chair of the
Board are independent.

New NED roles and responsibilities
I was delighted to take on the roles of Senior Independent
Director (SID) and designated NED for engagement with the
Ted Baker workforce. I am passionate about employee forums
when done in the right way and as a way to build trust with our
team members. I have dedicated a lot of time and effort over
the year and will continue to do so in the coming year, working
with Peter Collyer and his team.

SENIOR MANAGEMENT APPOINTMENTS FY21

As you can see, we have carefully balanced the talent and
capability of the Board to ensure it has the skills, diversity,
experience and ambition to deliver and execute our
transformation strategy. We have also rejuvenated the senior
management team to make it more focused and give it clear
accountability. These new hires, combined with the skills of
longer-serving team members who are steeped in the history
and DNA of the Ted Baker brand, make it a diverse and
creative team, committed to delivering our strategy.

New Chief Customer Officer
We believe this newly created role is a vital part of Ted Baker’s
future growth. Jennifer Roebuck, then a NED of the plc Board,
put herself forward as a candidate. Following a full and
independent process, she was appointed in March 2020 and
stepped down from her NED position on 31 March. Jen will
focus on developing a customer and digital strategy across the
business and will explore new digital partnership opportunities
to drive accelerated growth.

New Global Creative Director
In May 2020, we announced the appointment of Anthony
Cuthbertson as Global Creative Director. The Board was
delighted to attract Anthony to this key role in the business.
Underpinning Ted Baker’s strategy is an emphasis on design,
product quality and attention to detail (continuing our reputation

Ted Baker plc Annual Report and Accounts 2021

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for quirky and creative ideas), which we believe Anthony’s
passion and commitment will deliver brilliantly. He joined
Ted Baker in November 2020 and his influence is already
apparent in Ted Baker’s Spring/Summer ’21 collections and
will be at the heart of our Autumn/Winter ’21 collections.

New Group Commercial and Business Development Director
Helen Costello joined Ted Baker as Group Commercial and
Business Development Director in October 2020. She brings
experience from key commercial and executive roles at several
high-profile global fashion brands. Helen is key to driving
brand growth through new and existing networks. She will be
responsible for building and coaching the commercial functions
in best practice and for developing and executing the delivery
of short-, medium- and long-term growth strategies and plans.

BOARD EVALUATION FY21

This year, an internal Board evaluation was carried out by
Ted Baker’s Company Secretarial team. Executive Directors,
Non-Executive Directors and senior management responded
to a questionnaire based on key themes from the previous
year’s Board evaluation.

The Nominations Committee reviewed the findings that relate
to the composition of the Board and made recommendations
as appropriate. One of the main learnings was around diversity
on the Board, particularly the gender mix. Last year, there were
three women on the Board – Sharon Baylay, Jennifer Roebuck
and me. The changes to the Board, with Sharon not seeking
re-election and Jennifer’s move from the plc Board to the
senior management team, leaves an imbalance between
men and women.

Over the coming months, we will map Board requirements,
taking into account the desired size and composition of the
Board to increase diversity. This is about more than gender:
it includes expertise, skills, experience, background,
perspectives, and independence of thought and actions.
We will then make recommendations to the Board to help
achieve this goal.

Annual review of Directors’ time commitment
The Nominations Committee does an annual review of the
time required from the Chair, Senior Independent Director (SID)
and Non-Executive Directors (NEDs) to perform their duties.
This includes a review of Directors’ attendance at scheduled
meetings and their availability at other times.

In FY21, Directors were available, often at short notice outside
regular working hours, to discuss matters that required a prompt
decision in light of the Covid-19 pandemic. To support
Ted Baker’s transformation strategy, Directors made themselves
available for many more Board meetings and informal
meetings than normal in an average year – this was in response
to the successful recapitalisation of Ted Baker, the equity raise
and the sale and lease back of the Ugly Brown Building.

In a normal year, we expect the Chair of the Board to spend
two days a week working with Ted Baker. Other NEDs, are
expected to spend around 15 days a year. We also review
NED’s other commitments to make sure they have enough time
to fulfil their role with Ted Baker.

78 Ted Baker plc Annual Report and Accounts 2021

Senior on-boarding and training
When new people join Ted Baker at a senior level, we go
to great lengths to bring them up to speed so they can start to
make a difference quickly. I am responsible for the senior level
on-boarding and training programmes that make this possible,
supported by the Company Secretarial team.

The Directors’ on-boarding programmes shares a wide
range of relevant information about the Group. This includes
operational and business performance, along with details
of Group strategy, corporate governance and Board
procedures. The programme includes meetings with key
personnel, technical briefings and, in normal times, site visits,
which have been restricted by the pandemic this year.

Working with the Chair, we also looked at Directors’ training.
The Company Secretarial team have delivered regular
technical and topical updates at Board meetings, alongside
specific training with other in-house or external experts and
advisers. For example, Directors have been trained on their
duties during Covid-19 to keep their knowledge current and
enhance their experience.

We’ve identified future training needs for the Board that
include promoting a deeper understanding of governance,
statutory and regulatory developments – this training will take
place over the coming year.

Appointment process
The Committee works with the Chief Executive Officer on the
following appointments process for Non-Executive Director
roles, Executive Director roles and senior management positions.

ɫ The Nominations Committee specifies the role and

considerations to inform the search, including diversity,
current balance of skills and experience on the Board

ɫ From this we prepare a skills matrix. (This is reviewed along
with skills matrices of existing roles to inform succession
planning for the Board and senior management)

ɫ We then engage a search agency to support the

appointment. A search agency will normally be used for
the appointment of the Chair and Non-Executive Directors,
with different agencies chosen depending on the role

ɫ We agree the interview process structure

ɫ We then compile a list of interviewers for different stages

of the selection process

ɫ We outline referencing requirements and candidate checks

ɫ We consider any shareholder consultation needed and

engage with the Remuneration Committee.

Once all this is agreed, we set a timetable and begin the
search process. We always make appointments on merit
against objective diversity and inclusion criteria. The Board
considers how these criteria can offer equal opportunities for
candidates from minority groups in relation to specific roles.
You can read more about our Diversity and Inclusion strategy
on page 79.

Succession planning
The Committee regularly looks at succession planning for the
next generation of plc Directors. We recognise the importance
of creating and supporting a suitably talented diverse pipeline
of leaders. We review the skills and experience of the current
Board and consider whether these will support the delivery
of the Company’s strategic goals now and in the future.

Chief People Officer, Peter Collyer, regularly presents our
succession planning and talent development programme to the
Board. Ted Baker’s strategy is now well-established and its
execution isn’t dependent on any one individual. For Executive
Directors and roles in the leadership team, plans are in place
for sudden and unforeseen absences and for an orderly
medium-term succession. We will continue to develop these
plans for longer-term succession.

We use this approach to create development plans for our
most talented people. This means we can identify the right
people to deliver our strategy ongoing. With this in mind,
we encourage regular discussion between members of senior
management and the Board. This may be through presentations
to the Board, store and warehouse visits, or one-to-one
sessions with NEDs to discuss specific issues.

Appraisal process
We review the expertise and performance of Directors every
year. The annual appraisal of the Chair is led by me as the
Senior Independent Director. The Chair leads the appraisal
of the Chief Executive Officer, discussing their performance
at a meeting with the NEDs. Other Non-Executive Directors’
performance is reviewed by the Chair, with the Executive
Directors assessed by the Chief Executive Officer, and with
feedback from other Directors where appropriate.

The Board is satisfied that all our Directors possess relevant
experience. And in line with the recommendations of the 2018
Code, all Directors will stand for re-election at the 2021 AGM.

Diversity and Inclusion strategy
Boardroom diversity is an important consideration when
assessing a candidate’s ability to contribute to and complement
a balanced Board. As a global business, the Group recognises
the importance of having a team that represents our target
audience (as much as possible) so we can keep the brand
relevant and successful. The Group continues to support the
development and progression of all team members, with the
aim of achieving diversity at every level of the organisation.

We have also spent time developing our inclusion strategy.
For clarity, this covers diversity (the different types of people
that make up society, without any hierarchy), inclusion (creating
the culture, conditions and opportunities for everyone to thrive)
and intersectionality (understanding the unique experiences of
people who hold two or more identity pillars). You can read
more about this on page 36.

We consider the Group’s Equality, Diversity and Discrimination
Policy when making appointments.

Board appointments
When making Board appointments we will take objective
criteria into account and make sure we have the right mix
of people and capabilities. This will give us the skills and
experience we need to support the delivery of the Group’s
strategic goals.

We also welcome the guidance of the latest Hampton-
Alexander Review, which seeks to improve Board and
senior management diversity across FTSE 350 companies.
The following diversity breakdown is based on the make-up
as at 30 January 2021:

Gender split of Directors
28% female

Senior management’s
direct reports
58% female

Senior management
37% female

You can read our most recent UK gender pay gap report
at www.tedbakerplc.com. As a Board we have looked at
all the factors that might create a gender pay gap across the
Group. You can read more about how we are addressing this
on page 37.

FY22 – THE YEAR SO FAR

This year, we have reviewed our contingency plan for
unexpected departures and the Chief Executive Officer’s
succession plan. We continue to work with the CEO and
Chief People Officer to create a robust talent pipeline.

Objectives for the next financial year FY22
We are focused on reviewing the results of the Board
evaluation and making appropriate recommendations on the
composition of the Board. As Committee Chair, I will continue
to look at diversity on the Board throughout the year.

We will also continue to review options for deeper workforce
engagement. This includes creating the Fresh Eyes Forum in
our North American and European operations to make sure
the voice of our team members around the world is heard
in the boardroom.

The training and resources we created in FY21 to support
internal progression to senior management positions and the
Board will be rolled out through the year. This will underpin our
efforts to create a robust talent pipeline that creates continuity
in the Group’s growth and progression in the Ted Baker
business culture.

Helena Feltham
Chair of the Nominations Committee

13 June 2021

Ted Baker plc Annual Report and Accounts 2021

GOVERNANCEREPORTt Remuneration in a challenging year
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As you will see throughout this Annual Report, it has been a very tough
year for the retail sector and Ted Baker following the Covid-19 outbreak.
Despite the difficulties the Company faced, the Board is very pleased
with the progress that has been made with our strategic transformation
programme – especially the positive steps in cash management and
fine-tuning our operations to make the business run more efficiently.

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It was a busy year for the Remuneration Committee, with
14 formal meetings and regular updates in between to
achieve everything we felt was necessary to move our
remuneration strategy forward in the face of a challenging
external environment.

In light of the pandemic, the Non-Executive Directors and
Executive Team all took a voluntary pay cut of 15% of their fees
or salary for between three to five months. Other senior team
members earning over £70,000 took a voluntary pay cut of
5-10% of their salaries. There will be no bonus paid in respect
of FY21. In addition, the Remuneration Committee has spent
much time over the last few months considering how incentives
should be structured for the year ahead recognising both the
continued uncertainty in the short term as well as the expected
recovery following the easing of lockdown restrictions.

During the year, we were pleased to secure majority
shareholder support for a new Directors’ Remuneration Policy
following close consultation with our key shareholders.
Shareholders also supported new share plans and we issued
awards under these in the second half of the year. These share
plans allow us to motivate and incentivise the management team,
while aligning rewards with the experience of our shareholders.

REMUNERATION COMMITTEE MEMBERSHIP

The Committee is chaired by myself with Non-Executive
Directors Helena Feltham and Jon Kempster as members.
Members of the Executive Team are invited to attend meetings
when appropriate. I would like to thank Helena and Jon for
their invaluable support and contribution to our work this year.

ESTABLISHING OUR NEW REMUNERATION POLICY

Throughout the year we focused on the continuous
improvement of our remuneration policies to support
Ted Baker’s transformation strategy while continuing to
motivate our talented and committed teams. We also
concentrated on bringing these policies in line with market
standards, taking into account shareholder guidance and
expectations and the challenging retail environment in which
Ted Baker operates.

After much consideration by the Committee and with insights
from our key shareholders, we presented a new remuneration
policy for approval at our 2020 AGM. It is testament to the
rigour of our work and the consultation process that our
shareholders were very supportive, with 89.29% voting for
the policy.

To create the policy, the Committee considered a wide variety
of factors. These included workforce remuneration and related
policies, the alignment of incentives and awards with culture,
and the long-term success of the Group. This fed into a set of
reward principles we agreed should apply to the organisation
from top to bottom:

ɫ Total reward approach

ɫ Competitive in the retail market in the relevant country

ɫ Fair and equitable packages based on internal career level

and external market value

ɫ Performance rewarded through bonus and share plans

ɫ Aligned to Ted Baker’s values with clear and well

communicated benefits including wellbeing, recognition
and engagement

ɫ Transparency of principles, frameworks and policies.

We believe that developing our policies and practices based
on these principles will underpin our corporate purpose and
nurture our culture.

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80 Ted Baker plc Annual Report and Accounts 2021

KEY CHANGES TO OUR POLICY LAST YEAR:

ɫ Alignment of the pension contribution rates for Executive
Directors (or payments in lieu) with those available to the
wider workforce

ɫ An increase in annual bonus and Long-Term Incentive

Plan (LTIP) maximum opportunity levels to ensure that our
remuneration package remains competitive to attract,
retain and motivate Executive Directors

ɫ Introducing strategic metrics to the annual bonus, while
the majority of the bonus remains based on financial
performance

ɫ Introducing annual bonus deferral for greater alignment
between Executive Directors and shareholders as well
as in line with corporate governance best practice

ɫ Increasing flexibility in the LTIP to set financial performance

conditions on an annual basis in line with Company strategy
and the business environment at the time of grant

ɫ Introducing a combined vesting and holding period of at

least five years under the LTIP in line with the UK Corporate
Governance Code

ɫ More discretion for the Committee to override formulaic

remuneration outcomes when appropriate

ɫ Introducing a post-cessation shareholding requirement

in line with the UK Corporate Governance Code and to
ensure that Executive Directors remain aligned with
shareholders after they have left the Company.

We believe it is vitally important to maintain discretion around
remuneration to avoid situations that do not reflect underlying
Company and individual performance, and wider business
circumstances. Given the turnaround position the Company
is navigating, executives must be motivated to achieve the
fast-evolving strategic objectives to bring Ted Baker back
to growth. A key principle of our executive remuneration
framework is that executive pay reflects the experience of
our shareholders.

SHARE AWARDS – RECOGNISING EVERYONE’S
COMMITMENT

In the second half of the year, we put all these principles into
action, motivating executives, senior management and our UK
employee base through considered share awards aligned to
our strategy. We believe using share plans as a tool to focus
and drive the senior management’s efforts in the same direction
as our Executive Directors will help us meet and exceed our
long-term goals.

In September 2020, awards were made under the 2020 LTIP
to our Executive Directors, Rachel Osborne and David Wolffe.
Awards were also made during the year under the new
2020 Ted Baker Incentive Plan (2020 TBIP) approved by
shareholders at the 2020 AGM. This included awards to
Ted Baker’s senior management, based on the same metrics
and targets used to incentivise Ted Baker’s Executive Directors.
This group of senior leaders are critical to successfully
delivering our transformation over the next three years.

By making these share awards, we aim to engage our
senior management and the leadership team by tying their
rewards to the strategic objectives of the business. At the
same time, it aligns them to the experience of our shareholders.
This approach will help the Remuneration Committee
support the Nominations Committee as it builds a strong
succession pipeline.

The Remuneration Committee was pleased to offer all our
UK-based team members the chance to share in the success
of the transformation strategy, through the Ted Baker Sharesave
Scheme, a Save As You Earn plan.

STRENGTHENING OUR LEADERSHIP

We have seen several important changes in Directors during
the year with the arrival or change in role of a number of key
Directors. All these changes reflect the need to attract and
retain the right balance of skills and experience to keep
Ted Baker moving forward. Here is what this means from
a remuneration point of view:

Rachel Osborne became Chief Executive Officer.
On appointment, her salary was set at £525,000 per
annum and, in line with the wider workforce, she receives
a pension contribution of 3%.

David Wolffe joined Ted Baker as Chief Financial Officer.
On appointment, his salary was set at £375,000 per annum,
with a pension contribution of 3% that is in line with the wider
workforce. In September 2020, David extended his remit to
include property, investor relations, strategy and our supply
chain. The Remuneration Committee agreed to an increase in his
salary to £395,000 to reflect these additional responsibilities.

John Barton joined us as Non-Executive Chair in July 2020
with an annual fee of £200,000 per annum.

Colin La Fontaine Jackson joined the Board as Non-Executive
Director on 1 September 2020 with an annual fee of £60,000.

We would like to congratulate Rachel, David, John and Colin
on their appointments and look forward to working with them
on the next phase of Ted Baker’s development.

REMUNERATION OUTCOMES FY21

There is no doubt Covid-19 created a perfect storm that
made trading conditions very difficult throughout the year.
As a result, profit expectations at the start of the year have not
been met. Despite the strong personal performance of both
the CEO and CFO and the progress made on executing our
transformation strategy, the Committee felt it would not be
appropriate to pay a bonus in respect of FY21. This decision
reflected the Company’s reliance on government support
through the UK furlough scheme. For the same reason, there
will be no annual bonus for any of our team members across
the entire Group.

LTIP awards granted in 2018 were due to vest in April 2021.
Again, with the backdrop of difficult trading, the performance,
conditions for our profit growth and share price were not met.
Please note, the current CEO and CFO were not in role when
these awards were granted.

Ted Baker plc Annual Report and Accounts 2021

GOVERNANCEREPORTy
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OVERVIEW AND AIMS

This is a summary of the Directors’ remuneration policy and
its implementation for FY21. The policy was approved
by shareholders on 21 July 2020 at the Company’s Annual
General Meeting and is intended to apply for three years from
that date. No changes have been made to the policy since it
came into effect and the full policy can be found in the Group’s
Annual Report and Accounts for the year ended 25 January
2020 at www.tedbakerplc.com

The aim of the Directors’ remuneration policy is to attract,
motivate and retain high quality management. It is designed to
incentivise Executive Directors according to the levels of value
generated for shareholders. We use performance metrics that
create a strong link between Executive Director remuneration
and business performance over the short and longer term.

In particular, we considered the following factors while
formulating the remuneration policy, based on the UK
Corporate Governance Code:

ɫ Clarity – Incentive arrangements are based on clearly
defined financial and strategic performance metrics.

ɫ Simplicity – Remuneration arrangements are simple,

comprising of the fixed elements of base salary, benefits
and pension; short-term incentives of annual bonus; and
long-term incentives of the LTIP.

ɫ Risk – The Committee considers the structure of the

annual bonus and LTIP does not encourage inappropriate
risk-taking. In addition, malus and clawback provisions
apply to the annual bonus and LTIP.

ɫ Predictability – The total remuneration opportunity graphs,
as set out in the full remuneration policy, provide estimates
on the potential future reward opportunity including target
and maximum performance, as well as incorporating share
price appreciation.

ɫ Proportionality – The Remuneration Committee may

seek to override formulaic outcomes if they do not reflect
underlying Company and individual performance and the
wider business circumstances.

ɫ Alignment to culture – In determining executive

remuneration, the Remuneration Committee considers
a number of wider workforce themes as part of its review,
including workforce demographics and the reward,
incentives and conditions available to Ted Baker’s
workforce generally to ensure executive remuneration
is appropriate from a cultural perspective.

Our remuneration policy uses fixed annual elements such
as salary, pension and benefits to recognise the status of our
Executive Directors and to ensure current and future market
competitiveness. The annual bonus and LTIP provides a direct
link between remuneration and KPIs. They also create
alignment between the Executive Directors’ personal return
and the return to investors.

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THE YEAR AHEAD FY22

With much of the world still in lockdown in the first quarter
of 2021, the Remuneration Committee has not proposed an
increase in base salaries for Executive Directors in FY22. This is
consistent with the approach to higher-earning team members
across the Group, with no increases applied. There are a few
exceptions to reflect changes in role or responsibilities or
promotions. In April, we committed to increasing salaries for our
lower-paid team members, and we continue to pay National
Living Wage regardless of age. Anyone who did not receive
a salary review in April will be considered for one in the
second half of the year.

Recognising the continued impact of the pandemic on the
business, including that many of our stores will remain closed
for a period during FY22 and that the Group will continue to
be in receipt of government support, it has been determined
that the annual bonus for FY22 will operate over two separate
periods. Performance measures and weightings will remain
unchanged from the prior year – profit (75%) and strategic
objectives (25%) – with the exception of a financial underpin
which will apply to the strategic element. While the strategic
element will operate for the full financial year (subject to
a financial underpin), the financial element will operate
for a reduced period taking into account the Company’s
reliance on government support as well as the expected return
to profitability following the easing of lockdown restrictions.
It is anticipated the financial element of the bonus will be
introduced from the start of the second half of the year or
after the Company stops relying on government support.

The overall structure of the LTIP awards granted to Executive
Directors in FY22 remains unchanged, and awards will
be granted as normal in June 2021. However, in line with
shareholder guidance, the Remuneration Committee has
chosen to delay target setting until the second half of the
year in light of the continued economic uncertainty. The LTIP
is a key incentive and retention tool over the long term and the
Remuneration Committee believes that it is critical that targets
set are to be stretching but fair in order to align management
with the shareholder experience over the next three years.
The Committee is of the view that it will be better able to set
LTIP targets which strike this balance later in the year once
more is known on the shape of the Covid-19 recovery. Once
set, performance targets will be disclosed on our website.

Our Gender Pay Gap Report will be published on our investor
relations website at tedbakerplc.com by October 2021.
We are committed to creating equitable pay across gender
and roles of the same pay scale.

I would like to thank our shareholders for their ongoing support
in our approach to remuneration.

Andrew Jennings OBE
Chair of the Remuneration Committee
13 June 2021

82 Ted Baker plc Annual Report and Accounts 2021

SUMMARY OF POLICY FOR EXECUTIVE DIRECTORS AND IMPLEMENTATION FY22

Operation and link to strategy

Maximum potential

Performance metrics and time period

Implementation for FY22

BASE SALARY

ɫ Salary normally reviewed

ɫ No maximum salary,

annually and reflects the role
and sustained value of the
individual in terms of skills,
experience and contribution.

however annual increases
will normally be broadly
consistent with increases
in base salary of the wider
employee population unless
there is a change in role or
responsibility, or where
periodic benchmarking
demonstrates that the overall
remuneration package falls
below the Group’s policy of
the targeted median level.

Due to the ongoing challenges
associated with the Covid-19
pandemic, base salaries for
Executive Directors will not be
increased at this time.

Base salaries will therefore be
as follows:

ɫ CEO – £525,000
ɫ CFO – £395,000
The Committee intends to review
salaries at the start of the second half
of the year in line with the approach
being taken for the wider workforce.

Operation and link to strategy

Maximum potential

Performance metrics and time period

Implementation for FY22

ɫ 150% of base

salary.

ɫ Up to 200% of
base salary in
exceptional
circumstances.

ANNUAL BONUS

ɫ Drives and

rewards annual
performance.
ɫ Any bonus over
100% of base
salary is deferred
into shares for a
two-year period.

ɫ Malus and
clawback
provisions apply.

ɫ Performance is measured
over the financial year.
ɫ Performance measures may
include both financial targets
and quantifiable strategic
objectives. At least 75% of
the bonus will be linked to
the achievement of
financial targets.

ɫ 0% of the bonus will vest at
threshold performance with
100% of the bonus vesting
at stretch performance.

ɫ The Remuneration

Committee reserves the
right to override formulaic
outcomes if these do not
reflect underlying Company
and individual performance
and the wider business
circumstances.

ɫ Recognising the continued impact of the pandemic
on the business, the annual bonus for FY22 will
operate over two separate periods.

ɫ For FY22, 75% of the bonus will be based on profit
targets with reference to internal and external
forecasts and 25% of the bonus will be based on
delivering our transformation objectives, subject
to a full year profit underpin.

ɫ While the strategic element will operate for the

full financial year, the financial element will operate
for a reduced period taking into account the
Group’s reliance on government support following
the easing of lockdown restrictions.

ɫ The maximum bonus opportunity will be 150% of
base salary, although any payout will be capped
at a reduced level reflecting the fact that the
financial element will only operate for part of the
year. Two-thirds of the maximum opportunity will
be payable for on-target performance.

ɫ Strategic objectives for the CEO and CFO will focus
on delivery of Ted Baker’s transformation strategy.

Operation and link to strategy

Maximum potential

Performance metrics and time period

Implementation for FY22

RETIREMENT BENEFITS

ɫ Positioned to ensure broad

competitiveness and to align
with current market practice.

ɫ Executive Directors are entitled
to pension contributions to
a money purchase scheme
(or a cash allowance in lieu
of a contribution to a pension
scheme) at a rate aligned with
the majority of the wider UK
workforce. This is currently
3% of base salary.

ɫ No changes; Executive Directors
will continue to receive a pension
contribution in line with the wider
UK workforce of 3% of base salary.

Ted Baker plc Annual Report and Accounts 2021

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SUMMARY OF POLICY FOR EXECUTIVE DIRECTORS AND IMPLEMENTATION FY22 CONTINUED

Operation and link to strategy

Maximum potential

Performance metrics and time period

Implementation for FY22

LTIP

ɫ Drives the overall business
strategy and objectives
and aligns the interests of
shareholders and the
Executive Team over the
longer term.

ɫ Once vested, the LTIP
shares are subject to a
two-year holding period.

ɫ Malus and clawback
provisions apply.

ɫ 150% of base salary.
ɫ Up to 300% of base
salary in exceptional
circumstances.

ɫ In the case of new joiners,
a double award may
be granted in the year
following their recruitment
if no award was granted
in the first year of their
employment.

ɫ Awards vest dependent on the
achievement of performance
targets over three years.

ɫ Performance conditions may vary
but the Remuneration Committee
will consult with shareholders on
any major changes proposed.

ɫ 25% vesting if threshold

performance is achieved over the
three-year performance period,
rising to 100% vesting at stretch
performance.

ɫ The Remuneration Committee
reserves the right to override
formulaic outcomes if these do not
reflect underlying Company and
individual performance and the
wider business circumstances.

ɫ The maximum LTIP opportunity for
FY22 will be 150% of base salary
for the CEO and 125% of base
salary for the CFO.

ɫ The FY22 LTIP awards will

be subject to equally weighted
relative TSR and cash flow
targets. An EPS underpin
applies in respect of the element.

ɫ Target setting will be delayed

until the second half of the year
in light of the continued economic
uncertainty. Targets will however
consider internal and external
forecasts. Once set, performance
targets will be disclosed
on our website.

Operation and link to strategy

Maximum potential

Performance metrics and time period

Implementation for FY22

THE TED BAKER SHARESAVE SCHEME

ɫ Executive Directors may participate
in the Ted Baker Sharesave Scheme.

ɫ The purpose of the Sharesave
Scheme is to align the interests
of the Executive Directors with the
long-term interests of shareholders
and the wider workforce.

–

ɫ All Executive Directors may save up
to the statutory limit (currently £500
per month) towards options over
shares of the Company (at an
exercise price of not less than 80%
of market value) over any three-
or five-year period, in line with
invitations to the wider workforce.

ɫ No changes; Executive
Directors may continue
to participate in the
Group Sharesave
Scheme.

Operation and link to strategy

Maximum potential

Performance metrics and time period

Implementation for FY22

SHARE OWNERSHIP GUIDELINES

ɫ Executive Directors are encouraged to hold at least 100% of

–

ɫ No changes.

base salary in shares.

ɫ Shareholdings can be acquired over five years. If an Executive
Director has not met their guideline on the fifth anniversary
of their appointment, they will be expected to retain all shares
arising from exercised LTIP awards (other than shares sold
to pay tax liabilities) or any other share plan as determined
by the Remuneration Committee until such time as the guideline
is met.

ɫ Following cessation of employment, a former Executive

Director is required to retain 100% of shares which form part
of their shareholding guideline and which were obtained
following the vesting of LTIP awards (including any awards that
vest following cessation of employment) for a period of one
year following cessation of employment, and 50% for
an additional year.

Operation and link to strategy

OTHER BENEFITS

Maximum potential

Performance metrics and time period

Implementation for FY22

ɫ Current entitlements include car allowance and

ɫ None

–

ɫ No changes.

medical insurance.

ɫ The Remuneration Committee has discretion to provide

additional benefits which it considers necessary in order to
attract or retain Executive Directors and which are in line with
market practice.

ɫ Such additional benefits may include, for example, reasonable

relocation costs in respect of a new Executive Director.
ɫ Executive Directors are also offered a number of other

benefits in line with other team members such as participation
in the Ted Clothing Purchase Scheme.

84 Ted Baker plc Annual Report and Accounts 2021

SUMMARY OF POLICY FOR NON-EXECUTIVE DIRECTORS AND IMPLEMENTATION FOR FY22

The Board aims to recruit high-calibre Non-Executive Directors (NEDs) with broad commercial, international or other relevant experience.
The remuneration policy for NEDs is set by the Board, taking into account fees paid by other companies of a similar size and complexity.

Approach to setting fees

Additional fees

Other items

Implementation for FY22

ɫ Additional fees are paid for
being a member of a Board
Committee, for acting as a
chair of a Board Committee
or for acting as the Senior
Independent Director.

ɫ The Board reserves the right
to pay additional fees to
NEDs for taking on extra
responsibilities outside of
their normal duties.

ɫ Fees are reviewed at

appropriate intervals taking into
account the time commitment
expected and practice in peer
companies of a similar size,
sector and complexity.

ɫ Each NED is paid a basic fee.
A higher basic fee is typically
paid to the Chair of the Board.

ɫ There is no prescribed
maximum fee, but the
aggregate fees for NEDs
will not exceed the maximum
aggregate fee limit set out in
the Company’s Articles of
Association.

ɫ NED fees are not subject

ɫ No changes to fees levels

to clawback or withholding
arrangements.

ɫ The NEDs do not participate
in the Group’s annual bonus
scheme, long-term incentive
plans, health care arrangements
or employee share schemes
and do not receive any
retirement benefits.

ɫ The Group provides each
NED with relevant liability
insurance for the duration
of their appointment.
ɫ NEDs are reimbursed for
reasonable expenses.

for FY22.

ɫ NED fees are therefore

as follows:

– Chair – £200,000

– NED basic fee –
£60,000

– Additional fees –

£5,000 for SID; £5,000
for Committee
membership; £10,000
for Committee Chair.

CONTRACTS OF SERVICE AND LETTERS OF APPOINTMENT

Each Executive Director has a service contract. Service contracts and letters of appointment are available for inspection at the registered office.

Date of service contract/
letter of appointment

Duration of contract/appointment

Unexpired term

Notice period

Provision for
compensation

Executive Directors

Rachel Osborne1

11/11/2019

Contract is of unlimited duration

David Wolffe

18/05/2020

Contract is of unlimited duration

N/A

12 months

Non-Executive Directors

John Barton

01/07/2020

Three years

Andrew Jennings

01/04/2020

Three years

Helena Feltham

01/05/2019

Three years

Jonathan Kempster

17/12/2019

Three years

Colin La Fontaine Jackson

01/09/2020

Three years

2 years 5 months

3 months

2 years 2 months

3 months

1 year 3 months

3 months

1 year 10 months

3 months

2 years 7 months

3 months

None

1 As part of Rachel’s recruitment and included in her contract, it was agreed that her annual bonus within the financial year FY22 would be subject to a minimum of £70,000,

provided she has not left the Company by reason of gross misconduct before the time of payment.

Ted Baker plc Annual Report and Accounts 2021

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DIFFERENCES IN REMUNERATION POLICY FOR
ALL TEAM MEMBERS

CONSIDERATION OF EMPLOYMENT CONDITIONS
ELSEWHERE IN THE COMPANY

A consistent remuneration approach is applied to all levels
throughout the Group (with exceptions outlined below)
to ensure business strategy and performance are aligned,
and the total reward is sufficient to attract and retain high-
performing and talented individuals.

All team members of Ted Baker are entitled to a base salary,
access to a discretionary corporate and individual
performance-based annual or periodic bonus and a range
of benefits dependent upon their role within the Group.
Any exceptional increase to base salary is structured around
specific criteria linked to significant change in role or level
of responsibility, market value at a median level, value to
Ted Baker and cross-departmental equality for like roles.
The maximum opportunity for bonus and benefits is based
on career level, responsibility and function of the role.

LTIP awards are only available to Executive Directors. Awards
under the Ted Baker Incentive Plan are available to members
of senior management and members of the leadership team.
Share option grants under the Ted Baker Sharesave Scheme
are available to all UK team members.

Similar to Executive Directors, members of the Group
management team are encouraged to hold shares in
the Company.

Malus and clawback provisions for Executive Director
annual bonus payments and LTIP awards also apply to
senior members of the Group management team.

The Chief People Officer presents the proposed pay review
for the general team member population and any changes
to remuneration policy within the Group to the Remuneration
Committee at its meeting in February each year. The Committee
limits any increases in base salary for Executive Directors so
they are broadly in line with salary increases applied across
the general team member population other than in exceptional
circumstances detailed above. This includes the ability to make
incremental changes if the salary and total reward falls below
the targeted median range.

Proposed remuneration arrangements are discussed with team
member communication groups and senior management.
The Remuneration Committee does not specifically invite
team members to comment on the Executive Directors’
remuneration policy but any comments made by team
members are taken into account.

Any benchmarking exercise undertaken that subsequently
underpins the remuneration policy and its implementation for
Executive Directors, also takes into account the remuneration
levels of other Executive Team members within the Group.

The Remuneration Committee continues to support its
established commitment to the Group policy of targeting total
remuneration levels for senior management and team members
across the Group within the median range to retain and reward
key individuals.

As part of the Remuneration Committee’s annual work,
it has a calendar of team member engagements to explain
how executive remuneration aligns with wider Group pay
policy. In FY21 Andrew Jennings attended meetings with
Ted Baker’s Fresh Eyes Forum, Ted Baker’s US leadership team,
and a meeting for members of the leadership team and above.
This built on last year’s events where Andrew Jennings attended
an Executive Board meeting, a senior retail team meeting and
a development board meeting. Opportunities will be identified
for further team member engagement in FY22 that broaden our
engagement with team members across the business and at all
career levels.

CONSIDERATION OF SHAREHOLDER VIEWS

The Remuneration Committee reviews any shareholder
feedback on the Directors’ Remuneration Report to make sure
their views are considered in the formation and implementation
of the policy. We seek feedback from key shareholders on
any major changes to executive remuneration, including
major changes to the level of awards to be made or the
performance metrics in respect of the Company’s long-term
incentive schemes.

While developing our Directors’ Remuneration Policy,
we invested time for detailed consultation with major
shareholders and their feedback was incorporated into
the final policy presented at the 2020 AGM. This policy
gained 89.29% of our shareholders’ support.

86 Ted Baker plc Annual Report and Accounts 2021

n The tables below set out in a single figure the total amount of remuneration, including each element, received by each of the Executive and
o

Non-Executive Directors for the periods ended 30 January 2021 and 25 January 2020.

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DIRECTORS’ SINGLE TOTAL FIGURE OF REMUNERATION (AUDITED)

53 weeks ended
30 January 2021

Executive

Rachel Osborne
David Wolffe

Non-Executive

Andrew Jennings
Jennifer Roebuck3
Sharon Baylay4
Helena Feltham
Jonathan Kempster
John Barton6

Colin La Fontaine Jackson7

Salary5
£’000

Benefits1
£’000

Performance-
related bonus
£’000

Long-Term
Incentive Plans
£’000

Pension
£’000

Other items8
£’000

Total Fixed
payments

Total Variable
payments

502
262

76
11
55
74
74

117
25

23
16

–
–
–
–
–

–
–

1,196

–
–

–
–
–
–
–

–
–

–

–
–

–
–
–
–
–

–
–

–

14
8

–
–
–
–
–

–
–

53
–

–
–
–
–
–

–
–

592
286

76
11
55
74
74

117
25

1,310

–
–

–
–
–
–
–

–
–

–

Total
FY212
£’000

592
286

76
11
55
74
74

117
25

1,310

Notes:
1 Benefits comprise private medical insurance and car benefits.
2 There has been no benefit relating to share price appreciation during the year or discretion exercised regarding any award where that discretion was influenced by share price

appreciation or depreciation.

3 Resigned from the Board on 31 March 2020.
4 Left the Board on 21 July 2020.
5 This figure includes the voluntary pay cut in light of the pandemic.
6 Appointed to the Board on 1 July 2020.
7 Appointed to the Board on 1 September 2020.
8 Rachel incurred certain losses due to her being required to repay part of a bonus she had received. Under her service contract, Rachel is entitled to be compensated by the

Company in respect of such losses up to a maximum amount of £200,000. The total amount that Rachel will be required to repay to her previous employer is £35,821.37, which
is to be repaid in nine monthly instalments. The amounts shown in the table reflect the gross payments to Rachel during the 53 weeks ended 30 January 2021 to compensate her
(on an after-tax basis) for the repayments she has made. Rachel had agreed on joining, in her contract of employment, that she would be entitled to a guaranteed bonus of
£70,000 which will be payable in October 2021.

52 weeks ended
25 January 2020

Executive
Ray Kelvin1
Lindsay Page2
Rachel Osborne3
David Bernstein4

Non-Executive

David Bernstein4
Ron Stewart
Andrew Jennings
Jennifer Roebuck
Sharon Baylay
Helena Feltham5
Jonathan Kempster6

Salary
£’000

Benefits7
£’000

Performance-
related bonus
£’000

Long-Term
Incentive Plans
£’000

Pension
£’000

Other items
£’000

Total Fixed
payments

Total Variable
payments

40
398
99
158

9
77
76
67
83
37
9

2
17
5
–

–
–
–
–
–
–
–

1,053

–
–
–
–

–
–
–
–
–
–
–

–

–
–
–
–

–
–
–
–
–
–
–

–

–
50
5
–

–
–
–
–
–
–
–

–
–
15
–

–
–
–
–
–
–
–

42
465
124
158

9
77
76
67
83
37
9

1,147

–
–
–
–

–
–
–
–
–
–
–

–

Total
FY208
£’000

42
465
124
158

9
77
76
67
83
37
9

1,147

Notes:
1 Ray Kelvin resigned from the Board on 4 March 2019.
2 Lindsay Page resigned from the Board on 10 December 2019.
3 Rachel Osborne was appointed to the Board on 11 November 2019 as Chief Financial Officer and on 10 December 2019 was appointed to Acting Chief Executive Officer.

Rachel received a salary increase of £55,000 per annum for the period she was acting in this capacity and this has been reflected in her remuneration detailed above.
As a result of resigning from her previous employer, Rachel incurred certain losses due to her being required to repay part of a bonus she had received. Under her service
contract, Rachel is entitled to be compensated by the Company in respect of such losses up to a maximum amount of £200,000. The total amount that Rachel will be required
to repay to her previous employer is £35,821.37, which is to be repaid in nine monthly instalments. The amounts shown in the table reflect the gross payments to Rachel during
the 52 weeks ended 25 January 2020 to compensate her (on an after-tax basis) for the repayments she has made.

4 David Bernstein was Non-Executive Director from 26 January 2019 to 3 March 2019 and then appointed to Executive Chair on 4 March 2019. David resigned from the Board

on 10 December 2019. During the period, he performed the role of Executive Chair and received a salary of £200,000 per annum and this has been reflected in his
remuneration detailed in the ‘Executive’ section of the table above.

5 Helena Feltham was appointed to the Board on 1 May 2019.
6 Jonathan Kempster was appointed to the Board on 17 December 2019.
7 Benefits comprise private medical insurance and car benefits.
8 There has been no benefit relating to share price appreciation during the year or discretion exercised regarding any award where that discretion was influenced by share price

appreciation or depreciation.

Ted Baker plc Annual Report and Accounts 2021

GOVERNANCEREPORT

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ANNUAL RATES OF SALARY IN FORCE DURING THE PERIOD

On her appointment to Chief Executive Officer on 30 March 2020, Rachel Osborne’s salary was set at £525,000 per annum
(previously her salary was £495,000).

David Wolffe was appointed as Chief Financial Officer on a salary of £375,000 per annum. In September 2020, David Wolffe’s remit
expanded to include investor relations, strategy and supply chain. The Remuneration Committee agreed a salary increase from £375,000
to £395,000 to reflect these additional responsibilities.

ANNUAL BONUS (AUDITED)

For FY21, 75% of the annual bonus was based on profit targets and 25% on individual objectives linked to the delivery of the Company’s
transformation strategy.

The Covid-19 pandemic and resulting lockdown restrictions made trading conditions very difficult in FY21. Overall, in FY21, Ted Baker
delivered an underlying PBT loss of £59.2 million.

Despite the financial performance exceeding the expected range, the strong personal performance of both the CEO and CFO and the
progress made on executing our transformation strategy, the Committee felt it would not be appropriate to pay a bonus in respect of FY21.
This decision reflected the Company’s reliance on government support through the UK furlough scheme. There will also be no annual bonus
paid to the wider team member population.

Profit targets considered both internal and external forecasts and recognised the position of the Company in its transformation strategy.
These targets did not factor in the full impact of the pandemic on the business.

Threshold
(0% awarded)

Target
(67% awarded)

Maximum
(100% awarded)

Actual outcome

Profit before tax

£73.2 million loss

£66.5 million loss

£59.9 million loss

£59.2 million loss

OBJECTIVES LINKED TO THE TRANSFORMATION STRATEGY (25% OF TOTAL BONUS)

Both the Chief Executive Officer and Chief Financial Officer performed strongly in FY21, delivering on their objectives, as described below,
and providing exceptional leadership through an extremely challenging year. Despite this performance, as described above, the Committee
determined no bonus would be payable for FY21.

Chief Executive Officer – strategic performance
ɫ Operational Excellence – Improvement in gross margin through consolidation of supplier base. Number of active suppliers reduced

by over a third.

ɫ Operational Excellence – Significant reduction in expenditure. Commencement of full cost review during the year, which increased

in scope and scale during the pandemic, and delivery of material savings across central and retail store costs. Additional future cost savings
expected as a direct result of action taken during the year.

ɫ Stabilise the Group’s Foundations – Further strengthening the Group’s leadership and enhancement of succession plan. This includes

several senior appointments during the year, notably a Chief Creative Officer and Group Commercial and Business Development Director.
All Executive roles have clear accountabilities and objectives. The Group now has a highly effective, diverse and creative leadership team
committed to delivering the transformation strategy.

Chief Financial Officer – strategic performance
ɫ Operational Excellence – Improvement in retail store profitability. Comprehensive review of retail stores across all territories, with a focus

on reduction in global payroll costs. Preparation of roadmap demonstrating path to achievement.

ɫ Operational Excellence – Enhancement of operational and financial controls across the business, including implementation of complete
delegation of authority matrix, delivery and management of risk register action on the relaunch of the internal audit function and material
progress made on remediation actions recommended following Deloitte’s review into the overstatement of inventory.

ɫ Operational Excellence – Significant improvement in working capital efficiency through the reduction in stock cycle from three to two years.

88 Ted Baker plc Annual Report and Accounts 2021

LONG-TERM INCENTIVE SCHEMES (AUDITED)

Awards Under the Ted Baker plc Long-Term Incentive Plan 2013 (Audited)
During the period, the sixth award granted under the 2013 LTIP was due to vest on 2 April 2021. The table below summarises actual outcomes
against the performance conditions set for that award.

Threshold performance target

Maximum performance target

Actual performance achieved

Share price increase underpin1

Profit per share growth2

Performance conditions

10.0%

(96%)

10.0%

15.0%

(85)%

Percentage of maximum achieved

Share price underpin not achieved

1 Based on base average six-month share price at the award date of £27.12 and the six-month average at the vesting date of £3.56.

2 Based on base profit per share in FY17 of 148.37p and final profit per share of 22.25p in FY20.

In light of the very difficult trading environment, the required performance conditions for our profit growth and share price were not met.
The current CEO and CFO were not in role when these awards were granted. The Committee did not exercise discretion in relation to the
vesting of these awards.

Awards granted under the LTIP during the year (Audited)
In September 2020, awards were made under the 2020 LTIP to Rachel Osborne and David Wolffe, as detailed in the table below.

Date of award

Type of award

Number of shares

Face value (£)1

Rachel Osborne

4 Sept 20

Nil-cost options

1,413,189

1,574,999

David Wolffe

4 Sept 20

Nil-cost options

708,838

790,000

Face value1
(% of salary)

Percentage vesting
for threshold
performance

End of performance
period/vesting date

300%

200%

25%

4 Sept 23

1 Face value based on a share price of £1.1145, being the average middle market price in the five dealing days prior to grant.

These awards are subject to the following performance conditions. In line with the remuneration policy, any shares vesting would be subject
to an additional two-year holding period.

Weighting

Threshold performance1
(25% of the award vests)

Maximum performance1
(100% of the award vests)

Total shareholder return performance relative to retail comparators
as measured over 36-month period beginning 4 September 20202

Cash flow for the financial year ending January 20233

50%

Median

Upper quartile

£30 million

£55 million

1 Straight line vesting between the points shown, with no vesting below threshold.

2 Retail comparators: ASOS plc, Boohoo Group plc, Burberry Group plc, B&M European Value Retail S.A., Dixons Carphone plc, Frasers Group plc, Halfords Group plc,

Joules Group plc, N Brown Group plc, Mulberry Group plc, MySale Group plc, Marks and Spencer Group plc, Next plc, Quiz plc, Shoe Zone plc, Studio Retail Group plc,
Superdry plc and WH Smith plc.

3 The cash flow element of the award (50% weighting) is subject to a minimum level of EPS being achieved, such that if EPS for the financial year ending in January 2023 is below

7.6p then the cash flow element will lapse in full.

SHARESAVE SCHEME (AUDITED)

Awards made during the year to Executive Directors under the Ted Baker Sharesave Scheme are detailed in the table below.

David Wolffe

28 Sept 20

Share options

12,857

0.84

13,127

1 Nov 23 to 30 Apr 24

Date of award

Type of award

Number of shares

Exercise price (£)

Face value (£)1

Exercise period

1 Face value based on a share price of £1.0210, being the closing share price on the date of the award.

Ted Baker plc Annual Report and Accounts 2021

GOVERNANCEREPORTd
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Directors’ shareholding (Audited)
The Directors who held office during the period had the following interests, including family interests, in the shares of the Company.
The shareholding guidelines under the current Directors’ Remuneration Policy encourage Executive Directors (Rachel Osborne and
David Wolffe) to hold at least 100% of base salary in shares. Shareholding for new Executive Directors can be acquired over five years.

Shares beneficially
owned as at
30 January 2021

Share options granted under
2013 LTIP and 2020 LTIP subject
to performance conditions1

Share options granted under
Ted Baker Sharesave Scheme
without performance conditions1

LTIP 2013
and LTIP 2020
share options

Shareholding
guideline met

Unvested

Vested but unexercised

Director

John Barton

Rachel Osborne

Andrew Jennings

Jennifer Roebuck

Sharon Baylay

Helena Feltham

Jonathan Kempster

David Wolffe

133,333

33,333

38,338

–

33,333

Colin La Fontaine Jackson

–

1,413,189

–

708,838

–

12,857

–

N/A

1 These unvested share options do not count towards the share ownership guidelines.

No LTIP awards were exercised during the period.

Progress against shareholding guidelines

Name

Salary

Share price1

Number of shares
needed to satisfy
the Shareholding
requirement

Shares beneficially
owned as at
30 January 2021

Percentage of
shareholding
requirement met

Share options
granted under
2013 LTIP and
2020 LTIP subject
to performance
conditions

Share options
granted under
Ted Baker Sharesave
Scheme without
performance
conditions

Date
shareholding
requirement
to be met

Rachel Osborne £525,000 £1.006

521,868

David Wolffe

£395,000 £1.006

392,644

33,333

1,413,189

–

30/03/2025

708,838

12,857

18/05/2025

1 Share price used is the closing middle market share price as at 29 January 2021.

PAYMENTS FOR LOSS OF OFFICE (AUDITED)

On 10 December 2019, Lindsay Page resigned as Chief Executive Officer and David Bernstein stepped down as Executive Chair.
Payments made in respect of their respective departures were disclosed in last year’s Remuneration Report. No further payments were
made in the period for loss of office.

PAYMENTS TO PAST DIRECTORS (AUDITED)

No payments were made in the period to past Directors (FY20: £nil).

90 Ted Baker plc Annual Report and Accounts 2021

PERFORMANCE GRAPH AND TABLE

The following graph charts the total cumulative shareholder return of the Company from January 2011 to January 2021 and shows the
Company’s performance against the FTSE All Share Personal Goods Index, the sector against which it is tracked by market analysts,
and also against the FTSE All Share Index to illustrate the Company’s performance in the general market.

Total cumulative shareholder return – January 2011 to January 2021

1,400

1,200

1,000

800

600

400

200

)

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Jan 09

Jan 10

Jan 11

Jan 12

Jan 13

Jan 14

Jan 15

Jan 16

Jan 17

Jan 18

Jan 19

Jan 20

Jan 21

Ted Baker

FTSE All Share Personal Goods

FTSE All Share

CEO REMUNERATION

For the financial periods ended:

FY12

FY131

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

Total remuneration

569

4,126

701

757

665

1,217

1,321

1,011

485

591

% of maximum performance-related bonus paid

67%

90%

100% 50%

% of maximum LTIP vesting

100% 0%

100% 100% 85%

–

1 Total remuneration for FY13 includes an amount relating to awards vesting under the Ted Baker 2009 Value Creation Plan in August 2012.

PERCENTAGE CHANGE IN REMUNERATION

The table below shows how the percentage change in the total remuneration for each Director excluding share-based payments in FY20
and FY21 compares with the percentage change in the average remuneration for all team members within the Group over the same period.

Year on year change %

Rachel Osborne

Andrew Jennings

Jennifer Roebuck2

Sharon Baylay3

Helena Feltham

Jonathan Kempster

All team members

Salary

–

1 The percentage change is 0% as no bonus was paid in either year.

2 Resigned from the Board on 31 March 2020.

3 Left the Board on 21 July 2020.

Benefits

260

–

Bonus1

–

Above table excludes Directors appointed during FY21 as they have no year-on-year comparative and is annualised for named Directors who have been appointed of resigned
in either period for better comparison.

All team members represents Group-wide team members, not team members of the Company alone.

Ted Baker plc Annual Report and Accounts 2021

GOVERNANCEREPORT

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CEO PAY RATIO

The table below compares the single total figure of remuneration for the Chief Executive Officer with that of the team members who are paid
at the 25th percentile (lower quartile), 50th percentile (median) and 75th percentile (upper quartile) of our UK team members population.

Year

2019/20

2020/21

Method

Option B

Option C

25th Centile pay ratio

Median pay ratio

75th percentile pay ratio

28:1

32:1

26:1

27:1

18:1

20:1

The remuneration figures for the employee at each quartile were determined with reference to the financial year ended on 30 January 2021.

Option C was used to calculate these figures in FY21. The Committee believes that this approach provides a fair representation of the CEO
to employee pay ratios and is appropriate in comparison to alternative methods, balancing the need for statistical accuracy with internal
operational constraints. Ted Baker’s gender pay gap data for April 2020 is not yet available, therefore salary rates in force at 30 January
2021 were used to identify the best equivalent for three Group UK team members whose hourly rates of pay are at the 25th, 50th and 75th
percentiles for the Group. A full-time equivalent total pay and benefits figure for the FY21 financial year was then calculated for each of those
team members, including furlough payments. The pay ratios outlined above were then calculated as the ratio of the CEO’s single figure to the
total pay and benefits of each of these team members.

The value of each team member’s total pay and benefits was calculated using the single figure methodology consistent with the CEO.
No elements of pay have been omitted.

The table below sets out the salary and total pay and benefits for the three identified quartile point team members:

25th percentile (P25)

Median (P50)

75th percentile (P75)

Salary and furlough payments

Total pay and benefits

18,000

18,532

20,602

21,713

28,673

29,683

The Committee considers that the median CEO pay ratio is consistent with the relative roles and responsibilities of the CEO and the identified
team members. Ted Baker is committed to offering its team members a competitive remuneration package targeted at the median range for the
role. Base salaries for team members, including our Executive Directors, are determined with reference to a range of factors including the role
and sustained value of the individual in terms of skills, experience and contribution, market value at the median level, and relative value to
Ted Baker. Due to the nature of the role, the CEO’s remuneration package has higher weighting on performance-related pay (including the
annual bonus and LTIP) compared to the majority of the workforce. This means the pay ratios are likely to fluctuate depending on the outcomes
of incentive plans in each year.

The Committee also recognises that, due to the nature of a company’s business and the flexibility permitted within the regulations for
identifying and calculating the total pay and benefits for team members, the ratios reported above may not be comparable to those reported
by other companies.

RELATIVE IMPORTANCE OF SPEND

The following table sets out the percentage change in dividends and employee remuneration for the 53 weeks ended 30 January 2021,
compared to the 52 weeks ended 25 January 2020.

Dividends

Employee remuneration1

1 Employee remuneration is net of furlough income.

REMUNERATION COMMITTEE AND ADVISERS

FY21
£’000

64,163

FY20
£’000

3,477

103,180

Percentage
change

(100%)

(38%)

Remuneration Committee
The Remuneration Committee is responsible for setting the remuneration packages of the Executive Directors of the Board and other senior
executives who fall within the scope of the Remuneration Committee. It approves all service contracts and other contracts between the
Company and its Executive Directors and senior executives and, if appropriate, approves any outside interests and other directorships of the
Executive Directors. The Committee also reviews and approves the design of the Company’s long-term incentive schemes and determines the
level of awards to be made and approves the performance metrics and targets.

The Remuneration Committee is chaired by Andrew Jennings and its other members are Helena Feltham and Jon Kempster. The Chair and
members are independent NEDs as noted in the corporate governance statements.

The terms of reference for the Remuneration Committee are available on the Company’s website at www.tedbakerplc.com.

92 Ted Baker plc Annual Report and Accounts 2021

Advisers
The Committee has engaged the external advisers listed below to help it meet its responsibilities.

During the year, following a competitive tender process, the Remuneration Committee appointed Deloitte LLP as independent advisers to
the Committee; they provided advice from their appointment in January 2021 on all remuneration matters considered by the Remuneration
Committee. Deloitte LLP are signatories to the Remuneration Consultants’ Code of Conduct, and the Remuneration Committee is satisfied
that the advice it receives is objective and independent. The Committee is satisfied that the Deloitte engagement team does not have
connections with Ted Baker plc or its Directors that may impair their independence. The Committee reviewed the potential for conflicts of
interest and judged that there were appropriate safeguards against such conflicts.

Prior to the appointment of Deloitte LLP in January 2021, PricewaterhouseCoopers LLP (PwC) acted as independent advisers to the
Remuneration Committee. The Remuneration Committee assessed from time to time whether it considered PwC to continue to be
independent. In assessing PwC’s independence, the Remuneration Committee was reassured by PwC’s adherence to the Remuneration
Consultants’ Group Code of Conduct.

Adviser

Appointed by

Service provided to the Remuneration Committee

Fees based on hourly rates

Other services provided to the Company

Pricewaterhouse
Coopers LLP

Company

Deloitte LLP

Company

Review of the short- and long-term
incentive arrangements, design and
performance conditions

£157,500

Support around the implementation
of policy for FY22

£11,900

Tax, legal, project management,
accounting and internal audit
services to the Group

Debt advisory, forensic accounting
and internal controls

The Remuneration Committee is also assisted in its work by the Group’s Chief Executive Officer, Chief Financial Officer and Chief People
Officer. Attendance at all Remuneration Committee meetings is extended as a matter of course by the Chair, Andrew Jennings, to Remuneration
Committee members only. The Group’s Chief Executive Officer, Chief Financial Officer and Chief People Officer are requested to attend and
present their views with regards to specific points of enquiry by the Committee, for example to be updated with regards to any changes to the
wider team member remuneration. To avoid conflicts of interest, the Chief Executive Officer, Chief Financial Officer and Chief People Officer
are not present when the Committee discusses agenda items that could impact their remuneration.

STATEMENT OF VOTING AT ANNUAL GENERAL MEETING

At the 2020 AGM, votes on the Remuneration Report (excluding the Directors’ Remuneration Policy) were cast as follows:

Approval of the 2020 Directors’
Remuneration Report

For %
Number

93.03%

Against %
Number

6.97%

127,484,038

9,547,067

Withheld

394,332

Reasons for votes against,
if applicable

Action taken by
Remuneration
Committee

The number of votes against
the Remuneration Report was not
considered to be significant

N/A

The Directors’ Remuneration Policy is subject to a binding vote by shareholders every three years and was last approved at the 2020 Annual
General Meeting held on 21 July 2020.

Approval of Directors’
remuneration policy included
within the 2020 Directors’
Remuneration Report

For %
Number

89.29%

Against %
Number

10.71%

122,540,753

14,694,581

Withheld
Number

Reasons for votes against,
if applicable

190,104

The number of votes against
the updated policy was not
considered to be significant

Action taken by
Remuneration
Committee

N/A

The Directors’ Remuneration Report was approved on behalf of the Board on 13 June 2021 and signed on its behalf by:

Andrew Jennings OBE
Chair of the Remuneration Committee
13 June 2021

Ted Baker plc Annual Report and Accounts 2021

GOVERNANCEREPORT
t We are required under the Listing Rules to produce a Directors’
r
o
p
e
r

Report by law, along with other statutory and regulatory disclosures
including under LR 9.8.4R as set out in the points below. We have
prepared and presented the information on pages 94-96 of this
document together with the information on pages 1-56.

The information outlined below would normally be included in the
Directors’ Report but can be found on the following pages of this
Annual Report. This forms part of the Directors’ Report:

’
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ɫ Information on energy consumption and greenhouse gas

emissions (on pages 44-45 of the Strategic report)

ɫ Information on future developments in the business

(on page 20 of the Strategic report)

ɫ Information on people policies and team members and
the employment of disabled people (on page 36 of
the Strategic report)

ɫ Information on engagement with its team members

(on pages 35-38 of the Strategic report)

ɫ Information on our regard for our business relationships
with suppliers, customers and others (on pages 38-45
of the Strategic report)

ɫ Information on the use of financial instruments (Note 25

to the financial statements on page 142)

ɫ Information on internal controls and risk management systems
in relation to the financial reporting process (on page 48
of the Strategic report)

ɫ Details of Directors waiving emoluments (on page 87

of the remuneration report)

ɫ Details of share allotments (on page 32)

ɫ The material contracts for the sale and leaseback of

the head office (on page 55).

MANAGEMENT REPORT

For the purpose of Disclosure Guidance and Transparency Rules
DTR 4.1.5R(2) and DTR 4.1.8, the Directors’ Report and the
Strategic report make up the Management Report.

SUBSIDIARY UNDERTAKINGS

The subsidiary undertakings of the Group in the period are listed
in Note 13 to the accounts. The Group also has branches
operating in Ireland, Portugal and Hong Kong.

RESULTS AND DIVIDENDS

The audited accounts for the 53 weeks ended 30 January 2021
are set out on pages 106-146. For the 53 weeks ended
30 January 2021 the Group’s loss before tax was £107.7 million
(2020: loss of £77.6 million). The Directors are not recommending
a final dividend.

DIRECTORS

During the period the Directors were those listed on pages 71
and 87. Details of the Directors’ beneficial interests in the shares
of the Company are shown on page 95. Details of their interests
in share options are given in the Directors’ Remuneration Report
on page 90. You will find brief career details for each Director
on pages 58-61.

94 Ted Baker plc Annual Report and Accounts 2021

SUBSTANTIAL SHAREHOLDINGS

As at 30 January 2021, the Company had been notified,
in accordance with the Disclosure Guidance and Transparency
Rules (DTR5), of substantial interests in the ordinary share
capital of the Company. For details see the table below:

Name of holder

Number

% held

Toscafund Asset Management

50,034,797

27.10%

Schroder Investment
Management

Ray Kelvin

Columbia Threadneedle
Investments

24,370,843

13.20%

21,743,607

11.78%

17,585,267

9.55%

3.69%

3.65%

Fidelity Management & Research

6,802,963

Legal & General

6,745,469

In accordance with LR9.8.6(2) there have been the following
changes in the interests disclosed to the Company between the
end of the period and 17 May 2021.

Name of holder

Number

% held

Toscafund Asset Management

47,804,383

25.89%

Schroder Investment
Management

Ray Kelvin

Columbia Threadneedle
Investments

24,330,993

13.18%

21,743,607

11.78%

17,643,562

9.56%

Fidelity Management & Research

6,804,792

3.69%

Legal & General

6,693,265

3.63%

SHARE CAPITAL AND CONTROL

Details of the Company’s share capital are shown in the
Group’s financial statements on page 139. As at 30 January
2021 there were 184,608,786 ordinary shares in issue.
The rights and obligations attaching to the Company’s shares,
as well as those conferred on their holders by law, are set
out in the Articles of Association. Subject to the Articles
of Association, the holders of ordinary shares are entitled
to receive all shareholder documents, attend and speak at
general meetings of the Company, exercise all voting rights
and receive dividends and participate in other distributions
of assets. The Company may not exercise any rights (such as
voting rights) in respect of any treasury shares and any treasury
shares carry no right to receive dividends or other distributions
of assets. Other than as set out in the Articles of Association,
the Company is not aware of any agreements between
shareholders restricting the voting rights or the right to transfer
shares in the Company.

The Directors were granted authority at the 2020 AGM to allot
shares in the capital of the Company up to an aggregate
nominal amount of £3,045,678 (being approximately 33%
of the total ordinary share capital in issue prior to the 2020
AGM). This authority is due to lapse at the Annual General
Meeting in 2021 (the 2021 AGM). At the 2021 AGM,
shareholders will be asked to grant a similar allotment authority.
The Directors were also empowered at the 2020 AGM to allot
shares for cash on a non-pre-emptive basis both in connection
with a rights issue or similar pre-emptive issue and, otherwise
than in connection with any such issue, up to a maximum
aggregate nominal amount of £461,466. Such amount
represented approximately 5% of the Company’s ordinary
share capital as it stood prior to the 2020 AGM in line with
the Pre-Emption Group Statement of Principles on disapplying
pre-emption rights (the Principles). As permitted by the
Principles, the Directors were also empowered at the 2020
AGM to allot shares for cash on a non-pre-emptive basis up
to the same amount for use only in connection with an
acquisition or a specified capital investment.

Both powers are due to lapse at the 2021 AGM at which
shareholders will be asked to grant similar powers in line
with best practice and the Pre-Emption Group’s Principles.
The Company did not seek an authority at the 2020 AGM
to buy back its own shares and there was no authority in place
as at the end of the period. The Company proposes to seek
authority to buy back its own shares at the 2021 AGM in line
with best practice.

APPOINTMENT AND REMOVAL OF DIRECTORS
AND ARTICLES OF ASSOCIATION

The Articles of Association provide that the Company’s
shareholders may appoint any person to act as a Director or,
on special notice, remove any Director from office by passing
an ordinary resolution at a general meeting. The Articles also
empower the Board to appoint any person as a Director. The
Articles set out when a Director must leave office. These include
where a Director resigns, becomes bankrupt or is prohibited
from acting as a director for other reasons, is absent from the
business for the long term or where a Director is required to
resign by all the other Directors.

The Articles provide that any Director who was appointed
by the Board during the period shall retire at the next Annual
General Meeting following his or her appointment, but that
Director may then stand for election by the Company’s
shareholders. Additionally, at each Annual General Meeting
one third of the Directors must retire from office and each
Director must retire at least once every three years. Retiring
Directors may stand for re-election by the Company’s
shareholders. Notwithstanding the provisions of the Articles,
the Company’s current practice, in accordance with the
recommendations of the Code, is to require each Director
to stand for election or re-election by the Company’s
shareholders on an annual basis. Changes to the Articles
of Association must be approved by the shareholders in
accordance with the legislation in force from time to time.
The powers of the Directors are determined by legislation
and the Articles of Association of the Company in force from
time to time.

The Articles can only be amended, or new Articles adopted,
by a special resolution passed by shareholders in a general
meeting by at least three quarters of the votes cast.

CHANGES OF CONTROL

There are a number of agreements that take effect, alter or
terminate upon a change of control of the Company following
a takeover bid, such as commercial contracts, bank loan
agreements and employee share schemes. None of these is
deemed to be significant in terms of its potential impact on the
business of the Company.

The Company does not have agreements with any Director
or employee that would provide compensation for loss of
office or employment resulting from a takeover, save that the
Company’s share schemes contain provisions which may
cause options and awards granted to team members to vest
on a takeover.

DIRECTORS’ INTERESTS

The Directors who held office at 30 January 2021 and their
connected persons had interests in the shares of the Company
as shown in the table below.

30 January
2021
Beneficial
Number

25 January
2020
Beneficial
Number

% of share
capital

John Barton

Helena Feltham

0.07% 133,333

0.02%

33,333

Colin La Fontaine Jackson

–

Andrew Jennings

Rachel Osborne

Jon Kempster

David Wolffe

0.02%

38,338

5,005

0.02%

33,333

0.02%

33,333

0.02%

33,333

–

In accordance with LR9.8.6R(1) there has been no change
in the beneficial interests of the Directors or their connected
persons between the end of the reporting period and
13 June 2021.

DONATIONS

The value of charitable donations made during the period was
£24,075 (2020: £17,527) and a total of 21 tonnes of stock
was donated to various charities (2020: 38 tonnes). There
were no political donations made or political expenditure
during the period (2020: £nil).

SOCIAL RESPONSIBILITY

Details of the Group’s social, ethical and environmental
responsibility initiatives can be found in our Sustainability story
on pages 34-47.

RISK MANAGEMENT

The Company’s policies on financial risk management are
outlined in Note 25 to the financial statements. This information
is incorporated into this Directors’ Report by reference.

Ted Baker plc Annual Report and Accounts 2021

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POST BALANCE SHEET EVENTS

On 24 May 2021, the Company entered into new agreements
with its lenders to extend its facilities until November 2023,
reducing facilities from £132.8 million to £90 million to January
2022, and reducing further to £80 million until expiry in
November 2023. This offers significant cash and covenant
headroom based on current Group forecast requirements.
The Group is also undertaking a restructuring in France
as further described in Note 27.

DIRECTORS’ STATEMENT REGARDING DISCLOSURE
OF INFORMATION TO THE AUDITORS

The Directors who held office at the date of approval of this
Directors’ Report confirm that, as far as they are aware, there
is no relevant audit information of which the Company’s
auditors are unaware. Each Director has also taken all the
steps necessary to ensure the Board is aware of any relevant
audit information and to establish that the Company’s auditors
are aware of any such information.

The report was approved by the Board of Directors on
13 June 2021 and signed on its behalf by:

Peter Hearsey-Zoubie
General Counsel & Company Secretary
13 June 2021

96 Ted Baker plc Annual Report and Accounts 2021

s The Directors are responsible for preparing the Annual Report and
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the financial statements in accordance with international accounting
standards in conformity with the requirements of the Companies Act
2006 and applicable law and regulations.

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Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
are required to prepare the Group financial statements and
have elected to prepare the Company financial statements
in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006.
Under company law the Directors must not approve the
financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and
Company and of the profit or loss for the Group for that period.
The Directors are also required to prepare financial statements
in accordance with international financial reporting standards
adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in the European Union.

In preparing these financial statements, the Directors are
required to:

ɫ Select suitable accounting policies and then apply

them consistently

ɫ Make judgements and accounting estimates that are

reasonable and prudent

ɫ State whether they have been prepared in accordance

with international accounting standards in conformity with
the requirements of the Companies Act 2006, subject to
any material departures disclosed and explained in the
financial statements

ɫ State whether they have been prepared in accordance
with international financial reporting standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies
in the European Union, subject to any material departures
disclosed and explained in the financial statements

ɫ Prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Company will continue in business

ɫ Prepare a Directors’ Report, a Strategic report and

Directors’ Remuneration Report which comply with the
requirements of the Companies Act 2006.

The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any
time the financial position of the Company and enable them
to ensure that the financial statements comply with the
Companies Act 2006 and, as regards the Group financial
statements, Article 4 of the IAS Regulation.

They are also responsible for safeguarding the assets of
the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for ensuring that the Annual
Report and Accounts, taken as a whole, is fair, balanced,
and understandable and provides the information necessary
for shareholders to assess the Group’s performance, business
model and strategy.

WEBSITE PUBLICATION

The Directors are responsible for ensuring the Annual Report
and the financial statements are made available on a website.
Financial statements are published on the Company’s website
in accordance with legislation in the United Kingdom
governing the preparation and dissemination of financial
statements, which may vary from legislation in other jurisdictions.
The maintenance and integrity of the Company’s website is the
responsibility of the Directors. The Directors’ responsibility also
extends to the ongoing integrity of the financial statements
contained therein.

DIRECTORS’ RESPONSIBILITIES PURSUANT TO DTR4

The Directors confirm to the best of their knowledge:

ɫ The financial statements have been prepared in

accordance with the applicable set of accounting
standards and Article 4 of the IAS Regulation and give
a true and fair view of the assets, liabilities, financial
position and profit and loss of the Group and Company.

ɫ The Annual Report includes a fair review of the development
and performance of the business and the financial position
of the Group and Company, together with a description
of the principal risks and uncertainties that they face.

We consider the Annual Report and Accounts, taken as
a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the
Group’s position and performance, business model and strategy.

On behalf of the Board

John Barton
Chair
13 June 2021

Rachel Osborne
Chief Executive Officer
13 June 2021

Ted Baker plc Annual Report and Accounts 2021

GOVERNANCEREPORT

98 Ted Baker plc Annual Report and Accounts 2021

F I N A N C I A L

STATEMENTS

FINANCIAL STATEMENTS
Independent auditor’s repor t
10 0
Income statement
106
107 Statement of comprehensive income
108 Statement of changes in equit y
110 Balance sheet
111 Cash flow statement
112 Notes to the financial statements
147 Five -year summar y
150 Company information

Ted Baker plc Annual Report and Accounts 2021

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Independent auditor’s report to the members of Ted Baker plc

QUALIFIED OPINION ON THE
FINANCIAL STATEMENTS

In our opinion, except for the possible effects of the matter
described in the basis for qualified opinion section of our report:

ɫ the financial statements give a true and fair view of the state
of the Group’s and of the Parent Company’s affairs as at
30 January 2021 and of the Group’s loss for the 53 weeks
then ended;

ɫ the Group financial statements have been properly prepared
in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006;

ɫ the Group financial statements have been properly prepared
in accordance with international financial reporting standards
adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in the European Union;

ɫ the Parent Company financial statements have been properly

prepared in accordance with international accounting
standards in conformity with the requirements of the
Companies Act 2006 and as applied in accordance with
the provisions of the Companies Act 2006; and

ɫ the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006; and,
as regards the Group financial statements, Article 4 of the
IAS Regulation.

We have audited the financial statements of Ted Baker plc
(the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the
53 weeks ended 30 January 2021 which comprise the Group
Income Statement, the Group Statement of Comprehensive
Income, the Group and Company Statement of Changes in Equity,
the Group and Company Balance Sheet, the Group and Company
Cash Flow Statement and the notes to the financial statements,
including a summary of significant accounting policies.

The financial reporting framework that has been applied in their
preparation is applicable law and international accounting
standards in conformity with the requirements of the Companies
Act 2006 and international financial reporting standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the
European Union, and as regards the Parent Company financial
statements, as applied in accordance with the provisions of the
Companies Act 2006.

BASIS FOR QUALIFIED OPINION WHICH IS
QUALIFIED SOLELY IN RESPECT OF THE
COMPARATIVE FIGURES

As explained in note 1.y to the financial statements, the Group
recorded, in its financial statements for the 52 weeks ended
25 January 2020, a number of adjustments to inventory values,
including amendments to inventory which had been overstated
at the previous year end. It has not been possible for us to
determine what the impact of these adjustments would have been
on inventory values at 26 January 2019 and consequently on
retained profit at that date and on the income and expenditure and
calculated cash flows for the 52 week period ended 25 January
2020. Accordingly, we have been unable to determine whether
the comparative figures shown in the financial statements relating
to that period have been prepared on a fully comparable basis.

We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described
in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to
provide a basis for our qualified opinion. Our audit opinion
is consistent with the additional report to the audit committee.

Independence
Following the recommendation of the audit committee, the members
approved our appointment at the AGM on 21 July 2020 to audit
the financial statements for the 53 weeks ended 30 January 2021
and subsequent financial periods. The period of total uninterrupted
engagement including retenders and reappointments is 1 year,
covering the 53 weeks ended 30 January 2021. We remain
independent of the Group and the Parent Company in accordance
with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the FRC’s Ethical Standard
as applied to listed public interest entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by that standard were not
provided to the Group or the Parent Company.

CONCLUSIONS RELATING TO GOING CONCERN

In auditing the financial statements, we have concluded that the
Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.

Our evaluation of the Directors’ assessment of the Group and the
Parent Company’s ability to continue to adopt the going concern
basis of accounting is considered to be a Key Audit Matter due
to the Group being significantly impacted by the COVID-19
Global Pandemic. The Directors’ assessment of going concern
has involved significant estimates and judgements.

The scope of our audit addressed this key audit matter through
the following:

ɫ We assessed the Directors’ forecast models with the assistance
of business restructuring specialists to test the application and
completeness of assumptions approved by the Directors within
the forecast cash flow model and the mathematical accuracy
of the calculations within the model.

ɫ We evaluated the reasonableness of the assumptions and future
plans modelled within the of directors’ base case forecasts and
the directors’ Severe But Plausible (“SBP”) downside stress test
and reverse stress test (“RST”) assessments including whether
such plans align with expectations within the wider retail industry
and adjusted for the Group’s specific circumstances.

ɫ We inspected the Group’s amended covenant terms under the
new facility agreement to gain assurance that the scenarios
modelled appropriately considered these terms.

ɫ We considered the directors assessment of the adequacy of
headroom on the loan covenants under both the base case
and SBP stress test. We also considered the RST and the extent
to which the likelihood of this scenario was sufficiently low to
support the directors’ conclusion that there was no material
uncertainty in relation to the adoption of the going concern
basis in the preparation of the financial statements.

ɫ We considered the adequacy of the disclosures in the financial

statements against the requirements of the accounting
standards and consistency of the disclosure against the
directors’ base case forecasts and the directors’ SBP stress test
and RST assessment.

Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Group’s or the Parent Company’s ability to continue as a going
concern for a period of at least twelve months from when the
financial statements are authorised for issue.

In relation to the Parent Company’s reporting on how it has applied
the UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to the Directors’ statement in the
financial statements about whether the Directors considered it
appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the Directors with
respect to going concern are described in the relevant sections
of this report.

100 Ted Baker plc Annual Report and Accounts 2021

OVERVIEW

Coverage1 86% of Group loss before tax

88% of Group revenue
92% of Group total assets

Key audit
matters

ɫ Going concern
ɫ Carrying value of inventory
ɫ Carrying value of non-current assets
ɫ Parent Company: Recoverability of investment in
subsidiaries and amounts due from subsidiaries.

The Group has 26 reporting components which represent
individual legal entities and branches and we assessed two
of these to be significant components. One of these significant
components is based in the UK and one in the US. We completed
full scope audits for the Parent company and each of the significant
components providing coverage of 92% of total assets, 88%
of revenue and 86% of the loss before tax. Non-significant
components were subject to either specified audit procedures
or desktop review procedures. The Group audit team completed
all audit work across the Group.

Materiality Group financial statements as a whole

Key audit matters

£2.4m based on 0.7% of Revenue (for the year)

1 These are areas which have been subject to a full scope audit by the group

engagement team

AN OVERVIEW OF THE SCOPE OF OUR AUDIT

Our Group audit was scoped by obtaining an understanding
of the Group and its environment, including the Group’s system
of internal control, and assessing the risks of material misstatement
in the financial statements. We also addressed the risk of
management override of internal controls, including assessing
whether there was evidence of bias by the Directors that may
have represented a risk of material misstatement.

Key audit matter

Group: Carrying value of inventory

Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified, including those which had the greatest
effect on: the overall audit strategy, the allocation of resources in
the audit, and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. In addition to
the matter described in the Conclusions related to going concern
section of our report, we have determined the matters below to be
the key audit matters to be communicated in our report.

How the scope of our audit addressed the key audit matter

£87.8m (2020: £131.7m)
of inventory held at the
balance sheet date.

Note 1.p sets out the
accounting policies
for inventory.

Note 1.x sets out sources
of estimation uncertainty
within inventory.

Note 1.y sets out the
errors or misstatements
relating to inventory for
the comparative periods
up to 25 January 2020.

Note 15 sets out the
components of inventory
and amounts recognised
as an expense in
the period.

Inventory is held at the lower of cost and
Net Realisable Value.

Cost
The carrying amount of inventories is
calculated at standard cost during the year
and adjustments are made to adjust standard
to actual cost for inventory held at the
reporting date. This involves the estimation
of variances between standard cost and
actual cost.

There was a change in basis of the estimate
during the period as set out in note 1y).

Net Realisable Value:
ɫ The Group has significant levels of

inventory and the Directors have estimated
the net realisable value of inventory based
on forecast sales of stock by season during
its lifecycle and providing against
remaining terminal stock that will be
disposed of or sold at below cost.
ɫ The COVID-19 pandemic has created

significant uncertainty in assessing the net
realisable value of inventory which
depends on the future anticipated sales.
ɫ COVID-19 has resulted in a significant
value of stock remaining unsold and
consequently being re-classified to a future
season which creates a heightened risk of
impairment over this category of inventory.

ɫ Management has estimated a provision

against this category of £1.6m.

Given the level of judgement and estimation
involved to ensure that inventory is correctly
valued at the lower of cost and net
realisable value, this was considered
to be a key audit matter.

Cost
ɫ We obtained an understanding of the systems and considered

the methodology applied by the Directors in determining the cost
of inventory.

ɫ We considered the directors’ estimates included within the cost of
inventory, assessing the director’s calculations comparing standard
cost to actual cost, comparing data used in the assessment to
extracted inventory movement data and agreeing a sample of
actual costs to supplier documentation.

ɫ We obtained all inventory movement data for the period and

involved data specialists to re-perform a reconciliation of opening
to closing inventory and identify unusual postings to inventory that
could indicate a potential material misstatement.

ɫ We considered whether the change to the basis of the estimate was
appropriate and accounted for and disclosed in accordance with
accounting standards.

Net Realisable Value:
ɫ We assessed forecast models used to determine anticipated sales
of inventory held at the balance sheet date and resulting terminal
stock value against which provisions have been made. To do this we
confirmed the forecasts included in the assessment were consistent
with the base case forecast used to support the Group’s going
concern assessment.

ɫ We evaluated sales assumptions used within the forecast models

by considering whether such plans align with expectations within the
wider retail industry as adjusted for Ted Baker’s specific
circumstances.

ɫ We analysed in period and post period sales prices to identify
products selling at low and negative margins, to identify further
indicators of impairment.

ɫ We assessed Management’s sensitivity analysis to consider how
actual sales that may differ from forecast sales could impact
inventory provisions.

ɫ We considered the adequacy of the disclosures in the financial
statements against the requirements of the accounting standards.

Key observations:
As a result of performing the procedures above we did not identify
indications of material misstatement in relation to the Directors’ estimates
of net realisable value and adjustments to cost.

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Key audit matter

How the scope of our audit addressed the key audit matter

Group: Carrying value of non-current assets

Store impairments:
Coivd-19 has resulted in restrictions and store
closures and continuing uncertainty at the
balance sheet date. The majority of stores
in the group (with assets included within
property, plant and equipment and right-of
use assets) have therefore been assessed as
having indicators of impairment. Accordingly
an impairment assessment has been
completed by the directors.
ɫ The impairment assessment completed

by the directors assesses the recoverable
amount of its cash generating units
(individual stores) which requires the
forecasting and discounting of future
cash flows for inclusion within a value-in-
use model.

The value in use impairment assessments
include a high degree of estimation
uncertainty, particularly owing to the uncertain
impact of COVID-19 on future cash flows
and was therefore considered to be a key
audit matter.

£34.8m (2020: £47.0m
(Restated)) of intangible
assets.

£39.4m (2020: £122.7m
(Restated)) of property,
plant and equipment.

£81.8m (2020: £138.0m)
of right-of-use assets.

Notes 1.k-n sets out the
accounting policies for
the non-current
assets above.

Note 1.x sets out sources
of estimation uncertainty
and the key judgements
made in applying
policies.

Note 1.y sets out the
changes in accounting
estimates in relation
to flagship stores and
IFRS 16 – rent
concessions.

Notes 11, 12 and 21
set out the components
of the non-current
assets above.

Store impairments:
ɫ We assessed the forecast models used to determine anticipated
future cash flows in the directors’ impairment assessment. To do
this we confirmed the forecasts included in the assessment were
consistent with the base case forecasts used to support the Group’s
going concern assessment.

ɫ We evaluated the assumptions used within the forecast models
including whether such plans align with expectations within the
wider retail industry and adjusted for Ted Baker’s specific
circumstances within the jurisdictions of the store portfolio.

ɫ We assessed the methodology applied within the impairment model

against the relevant accounting standards and considered the
appropriate interaction of IAS 36 (impairment) and IFRS 16 (leases).
This included:

– assessing the appropriateness of the cash generating units used
in the impairment assessment and considered the anticipated
future cashflows modelled for each cash generating unit for the
purposes of the assessment.

– using our internal valuations specialists to assess the

reasonableness of the discount rate applied in the value-in-
use model.

ɫ We assessed Management’s sensitivity analysis to consider how
actual results that may differ from forecast results could impact
store impairments.

ɫ We assessed whether the disclosures in the financial statements

detail the key judgements within the impairment model and sources
of estimation uncertainty.

Corporate asset impairments:
ɫ The directors assessed the corporate asset
base (with assets included within intangible
assets, property plant and equipment
and right-of-use assets), for indicators
of impairment.

Corporate asset impairments:
ɫ We assessed the forecast models used to determine anticipated
future cash flows in the directors’ impairment assessment. To do
this we confirmed the forecasts included in the assessment were
consistent with the base case forecasts used to support the Group’s
going concern assessment.

The directors then assessed the recoverable
amount of the corporate assets which required
the forecasting and discounting of future cash
flows for inclusion within a value-in-use model.
No impairments were identified.

Due to the material carrying value of the
corporate assets and the impact and
uncertainty arising from COVID-19, the
assessment of corporate assets for impairment
was considered to be a key audit matter.

ɫ We evaluated the assumptions used within the forecast

models including whether such plans align with expectations
within the wider retail industry as adjusted for Ted Baker’s
specific circumstances.

Key observations:
As a result of performing the procedures above we did not identify
indications of material misstatement in relation to the judgements and
estimates included within the impairment assessments.

Parent Company: Recoverability of investment in subsidiaries and amounts due from subsidiaries

£26.4m (2020: £25.2m)
of investments

£119.7m (2020: £27.1m)
of amounts due from
subsidiaries

Notes 1.o and q sets out
the accounting policies
for the above assets.

Notes 13 and 16 set out
the components of the
assets above.

During the financial period, the COVID-19
pandemic has adversely affected the
performance of subsidiaries in the Group,
with significant impact on cash generated.

The recoverability of the investments in and
amounts due from subsidiaries is reliant on the
future cash flows of those subsidiaries and
the directors have accordingly prepared
a value-in-use assessment and determined
that no impairment needs to be recognised.

Due to the degree of estimation uncertainty
inherent in this assessment this was considered
to be a key audit matter.

We assessed the forecast models used to determine anticipated future
cash flows in the directors’ recoverability assessment. To do this we
confirmed the forecasts included in the assessment were consistent
with the base case forecasts used to support the Group’s going
concern assessment.

We evaluated the assumptions used within the forecast models including
the growth rates applied beyond the going concern assessment period
and whether such plans align with expectations within the wider retail
industry as adjusted for Ted Baker’s specific circumstances.

We assessed whether the disclosures in the financial statements detail
the key judgements within the recoverability assessment and sources of
estimation uncertainty.

Key observations:
As a result of performing the procedures above we did not identify
indications of material misstatement in relation to the estimates included
within the value-in-use assessment.

102 Ted Baker plc Annual Report and Accounts 2021

OUR APPLICATION OF MATERIALITY

OTHER INFORMATION

We apply the concept of materiality both in planning
and performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by
which misstatements, including omissions, could influence the
economic decisions of reasonable users that are taken on the
basis of the financial statements.

In order to reduce to an appropriately low level the probability
that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent
of testing needed. Importantly, misstatements below these levels
will not necessarily be evaluated as immaterial as we also take
account of the nature of identified misstatements, and the particular
circumstances of their occurrence, when evaluating their effect on
the financial statements as a whole.

Based on our professional judgement, we determined materiality
for the financial statements as a whole and performance
materiality as follows:

Group financial
statements
2021
£m

Parent company
financial statements
2021
£m

Materiality

2.4

1.5

Basis for
determining
materiality

Rationale for the
benchmark
applied

Performance
materiality

Basis for
determining
performance
materiality

0.7% of revenue

1.0% of total assets

Revenue represents
the most appropriate
benchmark of
trading for the group
given the volatility in
performance caused
by the Covid-19
pandemic.

Total assets is
considered to be the
most appropriate
measure as the
Company is a holding
company that does
not trade.

1.4

0.9

60% of overall
materiality

Component materiality

We set materiality for each component of the Group based on
a percentage of between 63% and 75% of Group materiality
dependent on the size and our assessment of the risk of material
misstatement of that component. Component materiality ranged
from £1.5m to £1.8m. In the audit of each component, we further
applied performance materiality levels of 60% of the component
materiality to our testing to ensure that the risk of errors exceeding
component materiality was appropriately mitigated.

Reporting threshold

We agreed with the Audit Committee that we would report
to them all individual audit differences in excess of £48,000.
We also agreed to report differences below this threshold that,
in our view, warranted reporting on qualitative grounds.

The directors are responsible for the other information. The other
information comprises the information included in the annual
report and financial statements other than the financial statements
and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express
any form of assurance conclusion thereon. Our responsibility is
to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit,
or otherwise appears to be materially misstated. If we identify
such material inconsistencies or apparent material misstatements,
we are required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on
the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact.

To the extent that the other information refers to or is based on
comparative financial information to which the matter referred
to in the Basis for opinion section of our report relates, we have
been unable to determine whether such information may be
materially misstated.

We have no other matters to report in this regard.

CORPORATE GOVERNANCE STATEMENT

The Listing Rules require us to review the Directors’ statement in
relation to going concern, longer-term viability and that part
of the Corporate Governance Statement relating to the parent
company’s compliance with the provisions of the UK Corporate
Governance Statement specified for our review.

Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements or our knowledge obtained during the audit.

Going concern
and longer-term
viability

ɫ The Directors’ statement with regards to
the appropriateness of adopting the
going concern basis of accounting and
any material uncertainties identified set
out on page 55; and

ɫ The Directors’ explanation as to its

assessment of the entity’s prospects,
the period this assessment covers and
why the period is appropriate set out
on page 54.

Other Code
provisions

ɫ Directors’ statement on fair, balanced and

understandable set out on page 97;

ɫ Board’s confirmation that it has carried out
a robust assessment of the emerging and
principal risks set out on page 48;
ɫ The section of the annual report that

describes the review of effectiveness of
risk management and internal control
systems set out on page 72; and

The section describing the work of the audit
committee set out on page 72.

Ted Baker plc Annual Report and Accounts 2021

103

FINANCIALSTATEMENTSd
e
u
n

i
t

n
o
c

t
r
o
p
e
r

s
’
r
o

t
i

d
u
a

n
e
d
n
e
p
e
d
n
I

OTHER COMPANIES ACT 2006 REPORTING

RESPONSIBILITIES OF DIRECTORS

Based on the responsibilities described below and our work
performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions
and matters as described below.

Strategic
report and
Directors’
report

Directors’
remuneration

Matters on
which we are
required to
report by
exception

Except for the possible effects of the matter
described in the basis for opinion section of
our report:

In our opinion, based on the work undertaken
in the course of the audit:
ɫ the information given in the Strategic report
and the Directors’ report for the financial
period for which the financial statements are
prepared is consistent with the financial
statements; and

ɫ the Strategic report and the Directors’ report
have been prepared in accordance with
applicable legal requirements.

In the light of the knowledge and understanding
of the Group and Parent Company and its
environment obtained in the course of the audit,
we have not identified material misstatements in
the strategic report or the Directors’ report.

In our opinion, the part of the Directors’
remuneration report to be audited has been
properly prepared in accordance with the
Companies Act 2006.

Arising solely from the limitation on the scope
of our work relating to comparative financial
information, referred to in the Basis for opinion
section of our report above we have not
obtained all the information and explanations
that we considered necessary for the purpose
of our audit.

We have nothing to report in respect of the
following matters in relation to which the
Companies Act 2006 requires us to report
to you if, in our opinion:
ɫ adequate accounting records have not

been kept by the Parent Company, or returns
adequate for our audit have not been
received from branches not visited by us; or
ɫ the Parent Company financial statements and
the part of the Directors’ remuneration report
to be audited are not in agreement with the
accounting records and returns; or

ɫ certain disclosures of Directors’ remuneration

specified by law are not made.

As explained more fully in the Statement of Directors’
Responsibilities , the Directors are responsible for the preparation
of the financial statements and for being satisfied that they give
a true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due
to fraud or error.

In preparing the financial statements, the Directors are responsible
for assessing the Group’s and the Parent Company’s ability to
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group
or the Parent Company or to cease operations, or have no realistic
alternative but to do so.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF
THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect
a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
financial statements.

Extent to which the audit was capable of detecting
irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:

In identifying and assessing risks of material misstatement in respect
of irregularities, including fraud, we considered the following:

ɫ the nature of the industry, control environment and business

performance including the design of the Group’s remuneration
policies, key drivers for Directors’ remuneration and
performance targets;

ɫ the results of our enquiries of management and the Audit
Committee about their own identification of the risk of
irregularities;

ɫ any matters we identified through the review of the Group’s

documentation of their policies and procedures; and

ɫ the matters discussed among the audit engagement team

regarding how and where fraud might occur in the financial
statements and any potential indicators of fraud.

We gained an understanding of the legal and regulatory
framework applicable to the Group and the industry in which
it operates, and considered the risk of fraud and non-compliance
with applicable laws and regulations. These included but were not
limited to the Companies Act 2006, Financial Conduct Authority
regulations including the UK Listing Rules, the principles of the UK
Governance Code, employment law, pensions and tax legislation.

104 Ted Baker plc Annual Report and Accounts 2021

Our procedures included, but were not limited to:

USE OF OUR REPORT

This report is made solely to the Parent Company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the Parent Company’s members those
matters we are required to state to them in an auditor’s report
and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than
the Parent Company and the Parent Company’s members
as a body, for our audit work, for this report, or for the opinions
we have formed.

Sophia Michael (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London

13 June 2021

BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).

ɫ agreement of the financial statement disclosures to underlying

supporting documentation;

ɫ identifying and testing journal entries, in particular journal
entries posted to revenue, unusual account combinations,
journals posted through suspense accounts, journals posted
by unexpected users;

ɫ enquiries with management, the Audit Committee and enquiries

of internal legal counsel;

ɫ review of minutes of Board meetings throughout the year;

ɫ review of correspondence between the group and the

regulatory bodies;

ɫ review of tax compliance and involvement of our tax experts

in the audit; and

ɫ challenging assumptions and judgements made by

management in their significant accounting estimates and
judgements, in particular in relation to the measurement of
impairment provisions, valuation of inventory, recoverability
of parent company investments and amounts due from
subsidiaries and going concern.

Our audit procedures were designed to respond to risks of
material misstatement in the financial statements, recognising
that the risk of not detecting a material misstatement due to fraud
is higher than the risk of not detecting one resulting from error,
as fraud may involve deliberate concealment by, for example,
forgery, misrepresentations or through collusion. There are
inherent limitations in the audit procedures performed and the
further removed non-compliance with laws and regulations
is from the events and transactions reflected in the financial
statements, the less likely we are to become aware of it.

A further description of our responsibilities is available on
the Financial Reporting Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our
auditor’s report.

Ted Baker plc Annual Report and Accounts 2021

105

FINANCIALSTATEMENTSt For the 53 weeks ended 30 January 2021
n
e
m
e
t
a
t
s
e
m
o
c
n

Share of post-tax (losses) from joint ventures

Other operating income and expenses

Operating (loss)/profit

Gross profit/(loss)

Administrative costs

Distribution costs

Cost of sales

Revenue

Finance income

p
u
o
r
G

Finance expense

(Loss)/profit before tax

Taxation

(Loss)/profit after tax attributable to owners
of the Company

Loss per share

Basic

Diluted

Dividends per share

Interim

Final

53 weeks ended 30 January 2021

52 weeks ended 25 January 2020

Note

Underlying
£’000

Non-underlying
items1
£’000

Total
£’000

Underlying
£’000

Non-underlying
items1
(Restated)2
£’000

Total (Restated)2

£’000

351,983

–

351,983

630,478

–

630,478

(161,271)

190,712

(7,957)

(169,228)

(279,719)

(43,669)

(323,388)

(7,957)

182,755

350,759

(43,669)

307,090

(175,854)

(45,303)

(221,157)

(244,124)

(22,157)

(266,281)

(71,025)

(13,402)

(84,427)

(88,345)

(12,562)

(100,907)

6,488

17,446

23,934

144

–

144

(49,679)

(49,216)

(98,895)

18,434

(78,388)

(59,954)

(1,136)

399

(8,745)

(7)

655

–

(1,143)

1,054

(8,745)

(1,229)

138

(989)

(2,218)

–

138

(12,565)

(3,026)

(15,591)

(59,161)

(48,568)

(107,729)

19,149

2,135

21,284

4,778

(1,804)

(82,403)

(77,625)

11,243

9,439

(40,012)

(46,433)

(86,445)

2,974

(71,160)

(68,186)

(56.2p)

–

(153.0p)

7.8p

–

1 More details on non-underlying items and a reconciliation of Alternative Performance Measures are included in Note 3.

2 More details of the restatement are shown in note 1y).

The accompanying notes are an integral part of the financial statements.

106 Ted Baker plc Annual Report and Accounts 2021

e For the 53 weeks ended 30 January 2021
m
o
c
n

(Loss) after tax attributable to owners of the company

Other comprehensive (loss)/income

Items that may be reclassified to the income statement

Net effective portion of changes in fair value of cash flow hedges

Exchange differences on translation of foreign operations net of tax

Other comprehensive (loss)/income for the period

Total comprehensive (loss) for the period

1 More details of the restatement are shown in note 1y).

The accompanying notes are an integral part of the financial statements.

e
v
i
s
n
e
h
e
r
p
m
o
c

f
o

n
e
m
e
t
a
t
s
p
u
o
r
G

53 weeks ended
30 January
2021
£‘000

52 weeks ended
25 January
2020 (Restated)1

£‘000

(86,445)

(68,186)

(422)

(746)

(1,168)

2,227

1,472

3,699

(87,613)

(64,487)

Ted Baker plc Annual Report and Accounts 2021

107

FINANCIALSTATEMENTS

y For the 53 weeks ended 30 January 2021

t
i
u
q
e
n

s
e
g
n
a
h
c

f
o

n
e
m
e
t
a
t
s
p
u
o
r
G

Share
capital
£’000

Share
premium
£’000

Other
reserves
£’000

Translation
reserve
£’000

Retained
earnings
£’000

Note

Total equity
attributable
to equity
shareholders
of the parent
£’000

Balance at 25 January 2020 (restated)1

Comprehensive Loss for the period

Loss for the period

Exchange differences on translation of foreign operations

Current tax on foreign currency translation

Effective portion of changes in fair value of cash flow hedges

Deferred tax associated with movement in hedging reserve

Total comprehensive loss for the period

Transactions recognised directly in equity

Increase in issued share capital

Share-based payment charges

Movement on current and deferred tax on share-
based payments

Total

2,228

10,555

(743)

6,328

122,305

140,673

–

7,002

90,749

–

7,002

90,749

–

(428)

(422)

–

(86,445)

(1,333)

587

–

(1,333)

587

(428)

(746)

(86,445)

(87,613)

–

1,204

97,751

1,204

1,225

98,976

Balance at 30 January 2021

9,230

101,304

(1,165)

5,582

37,085

152,036

1 More details of the restatement are shown in note 1y).

For the 52 weeks ended 25 January 2020

Share
capital
£’000

Share
premium
£’000

Other
reserves
£’000

Translation
reserve
£’000

Retained
earnings
£’000

Note

Total equity
attributable
to equity
shareholders
of the Company2

£’000

Balance at 26 January 2019

Adjustment on initial application of IFRS 161

Balance at 27 January 2019 (restated)2

Comprehensive (loss)/income for the period

Loss for the period2

Exchange differences on translation of foreign operations

Current tax on foreign currency translation

Foreign exchange differences on disposal of subsidiaries

Effective portion of changes in fair value of cash flow hedges

Deferred tax associated with movement in hedging reserve

Total comprehensive (loss)/income for the period

Transactions recognised directly in equity

Net change in fair value of cash flow hedges transferred
to cost of inventory

Share-based payment charges

Movement on current and deferred tax on share-
based payments

Dividends paid

Total transactions with owners

2,228

10,555

(183)

4,856

211,012

228,468

–

894

2,228

10,555

(183)

4,856

211,906

229,362

–

2,205

2,227

(2,787)

–

(2,787)

–

(68,186)

1,764

(173)

(119)

–

1,764

(173)

(119)

2,205

1,472

(68,186)

(64,487)

–

225

(2,787)

225

(25)

(21,615)

(21,415)

(24,202)

Balance at 25 January 2020 (restated)2

2,228

10,555

(743)

6,328

122,305

140,673

1 The Group has initially applied IFRS 16 at 27 January 2019, using the simplified modified retrospective transition approach.

2 More details of the restatement are shown in note 1y).

The accompanying notes are an integral part of the financial statements.

108 Ted Baker plc Annual Report and Accounts 2021

y For the 53 weeks ended 30 January 2021

t
i
u
q
e
n

s
e
g
n
a
h
c

f
o

n
e
m
e
t
a
t
s
y
n
a
p
m
o
C

Balance at 25 January 2020

Profit for the period

Transactions with owners recorded directly in equity

Increase in issued share capital

Share-based payments charges for awards granted
to subsidiary employees

Dividends paid

Total transactions with owners

Balance at 30 January 2021

For the 52 weeks ended 25 January 2020

Balance at 26 January 2019

(Loss) for the period

Transactions with owners recorded directly in equity

Share-based payments charges for awards granted
to subsidiary employees

Dividends paid

Total transactions with owners

Balance at 25 January 2020

Note

The accompanying notes are an integral part of the financial statements.

Share
capital
£’000

Share
premium
£’000

Other
reserves
£’000

Retained
earnings
£’000

Total
equity
£’000

2,228

10,555

22,781

17,586

53,150

–

7,002

90,749

–

90,749

–

7,002

9,230

–

1,204

–

1,204

157

–

97,751

1,204

–

98,955

101,304

23,985

17,743

152,262

Share
capital
£’000

Share
premium
£’000

Other
reserves
£’000

Retained
earnings
£’000

Total
equity
£’000

2,228

10,555

22,556

44,791

80,130

–

(5,590)

225

–

225

–

(21,615)

225

(21,615)

(21,390)

2,228

10,555

22,781

17,586

53,150

Ted Baker plc Annual Report and Accounts 2021

109

FINANCIALSTATEMENTS

Investment in equity accounted investee

Investment in subsidiary companies

Amounts owed by Group undertakings

Property, plant and equipment

Prepayments

Intangible assets

Right-of-use assets

Deferred tax assets

Non-current assets

t At 30 January 2021
e
e
h
s
e
c
n
a
a
b
y
n
a
p
m
o
c
d
n
a
p
u
o
r
G

Income tax receivable

Income tax payable

Current liabilities

Current assets

Lease liabilities

Bank overdraft

Total assets

Derivative financial assets

Inventories

Trade and other payables

Provisions

Cash and cash equivalents

Trade and other receivables

Derivative financial liabilities

Amount due from equity accounted investee

Amounts owed by Group undertakings

Deferred tax liability

Provisions

Lease liabilities

Non-current liabilities

Total liabilities

Net assets

Share capital

Share premium

Other reserves

Translation reserve

Retained earnings

Total equity attributable to equity shareholders of the parent company

Total equity

Notes

1 The prior period errors or misstatements are detailed further in Note 1(y).

Note

Group
30 January
2021
£’000

34,758

39,401

81,759

3,691

–

27,635

541

187,785

87,848

44,666

4,305

–

7,983

66,671

211,473

399,258

(98,138)

Group
25 January
2020
(Restated)1
£’000

46,964

122,730

137,987

5,088

–

17,638

634

331,041

131,663

67,271

4,462

–

203

2,343

52,912

258,854

589,895

(96,202)

–

(180,000)

(2,607)

(33,754)

(1,973)

(1,191)

–

(36,381)

–

(1,095)

Company
30 January
2021
£’000

Company
25 January
2020
£’000

–

26,407

119,672

1,100

–

25,203

–

943

–

147,179

26,146

–

5,195

152,374

(112)

–

27,096

–

27,117

53,263

(113)

–

(137,663)

(313,678)

(112)

(113)

–

(3,588)

(2,942)

–

(106,617)

(131,956)

(109,559)

(135,544)

–

(247,222)

(449,222)

(112)

(113)

152,036

140,673

152,262

9,230

101,304

(1,165)

5,582

37,085

152,036

2,228

10,555

(743)

6,328

122,305

140,673

9,230

101,304

23,985

–

17,743

152,262

53,150

2,228

10,555

22,781

–

17,586

53,150

The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own statement
of comprehensive income in these financial statements. The profit/(loss) for the year in the accounts of the company was £157,000 (2020: (£5,590,000).

These financial statements were approved by the Board of Directors and authorised for issue on 13 June 2021 and were signed on its behalf by:

Rachel Osborne
Director

Company number: 03393836

The accompanying notes are an integral part of the financial statements.

110 Ted Baker plc Annual Report and Accounts 2021

Impairment

Adjusted for:

Income tax credit

Depreciation and amortisation

Share-based payments charge

Amortisation of reacquired right

Profit/(loss) on disposal of business

Write off property, plant and equipment

Loss on disposal of property, plant and equipment

Cash generated from operations
(Loss)/profit for the period

t For the 53 weeks ended 30 January 2021
n
e
m
e
t
a
t
s
w
o
fl
h
s
a
c
y
n
a
p
m
o
c
d
n
a
p
u
o
r
G

Increase/(decrease) in trade and other payables

Net cash generated from operating activities

Disposal of cash on disposal of Asian business

Change in accounting estimates for inventory

Proceeds from sale of property, plant and equipment

Decrease in trade and other receivables

Investment in equity accounted investee

Decrease in non-current prepayments

Increase in loans to group companies

Income taxes received/(paid)

IFRS 16 practical expediency

Share of loss in joint venture

Net finance expense

Decrease in inventory

Increase in provisions

Interest received

Cash flow from investing activities
Purchases of property, plant and equipment and intangibles

Net change in derivative financial assets and liabilities carried at fair value
through profit or loss

Dividends received from joint venture

Payments from joint venture

Net cash from investing activities

Cash flow financing activities
Repayment of term loan/overdraft

Drawdown of overdraft

Repayment of capital element of leases

Repayment of interest element of leases

Interest paid

Dividends paid

Proceeds from issue of shares

Cost of issue of shares

Net cash from financing activities

Net increase/(decrease) in cash and cash equivalents
Net cash and cash equivalents at the beginning of the period

Exchange rate movement
Net cash and cash equivalents at the end of the period1

Group
53 weeks ended
30 January
2021
£’000

Group
52 weeks ended
25 January
2020

(Restated)2
£’000

Company
53 weeks ended
30 January
2021
£’000

Company
53 weeks ended
25 January
2020
£’000

(86,445)

(68,186)

157

(5,590)

(21,284)

53,109

1,746

45,303

(17,446)

933

325

1,204

7,691

–

(361)

–

1,143

4,915

126

43,821

21,966

3,174

4,021

63,941

(6,981)

77,782

–

254

157

(9,439)

65,058

1,890

13,969

7,585

447

–

225

15,453

45,890

–

(44)

2,218

–

127

21,715

10,700

(2,202)

(6,953)

(157)

(943)

–

28,728

(658)

–

98,453

(92,557)

21,537

(25,823)

227

(5,710)

(865)

–

278

138

–

(92,557)

–

71,306

(31,755)

(92,557)

(180,000)

–

(29,045)

(6,781)

(1,974)

–

105,003

(7,252)

(47,000)

88,504

(34,089)

(7,248)

(4,256)

(21,615)

–

(120,049)

(25,704)

15,198

52,912
(1,439)

66,671

40,994

14,654
(2,736)

52,912

–

105,003

(7,252)

97,751

5,174

21
–

5,195

–

(21,615)

–

(21,615)

(78)

99
–

1 The Group cash flow for the 52 weeks ended 25 January 2020 has been represented to exclude overdrafts from cash and cash equivalents.

2 More details of the restatement are shown in note 1y).

The accompanying notes are an integral part of the financial statements.

Ted Baker plc Annual Report and Accounts 2021

111

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated and Company financial statements are set out below.
These policies have been consistently applied to all the periods presented, unless otherwise stated.

a) Basis of preparation

Both the consolidated and Company financial statements have been prepared in accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 (IFRS) and the applicable legal requirements of the Companies Act 2006. In addition to complying
with international accounting standards in conformity with the requirements of the Companies Act 2006, the consolidated financial statements also
comply with international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
On publishing the parent company financial statements here together with the consolidated financial statements, the Company is taking advantage
of the exemption in Section 408 of the Companies Act 2006 not to present its income statement and related notes that form a part of these approved
financial statements. As is common in the retail sector, the Group operates a weekly accounting calendar and this year the financial statements are for
the 53 weeks to 30 January 2021 (last year 52 weeks to 25 January 2020).

The consolidated and parent financial statements have been prepared under the historical cost convention, except for certain financial assets and
financial liabilities (including derivative instruments), which are held at fair value and for certain other assets and liabilities recognised at fair value on
business combinations. The consolidated and parent financial statements have been prepared in Pounds Sterling, which is the Group’s presentation
currency and are rounded to the nearest thousand Pounds Sterling.

The preparation of financial statements in conformity with Adopted IFRSs requires management to make judgements, estimates and assumptions that
affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are
based on historical experience, future budgets and forecasts, and various other factors that are believed to be reasonable under the circumstances,
the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates.

The estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate
is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The Group’s significant judgement and estimates are shown in Note 1x).

Adoption of new accounting standards, interpretations and amendments

The group has applied the following standards and amendments for the first time in these financial statements:

ɫ Definition of Material – Amendments to IAS 1 and IAS 8

ɫ Definition of a Business – Amendments to IFRS 3

ɫ Covid-19 – Related Rent Concessions – Amendment to IFRS 16

The application of these new standards and amendments did not have a material impact on the financial statements.

Certain new accounting standards and interpretations have been published that are not yet effective and have not been early adopted by the group.
These standards are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

Going concern

The consolidated financial statements have been prepared on a going concern basis. The Directors have prepared a going concern assessment
covering the 12 month period from the date of signing these financial statements, which demonstrates that the Group is capable of continuing to
operate within its existing facilities and can meet its financial covenant tests during the period. The Directors’ assessment considers the principal risks
facing the business, and a series of financial forecasts, which include a review of current performance and forecasts of revenue across all sales
channels combined with ongoing expenditure including capital expenditure and borrowing facilities. The forecasts have been prepared whilst
considering various levels of disruption from the Covid-19 pandemic. The Directors have concluded that it is appropriate to adopt the going concern
basis of accounting in preparing these financial statements for the reasons set out below.

The Group acted quickly to mitigate the impact of Covid-19 by taking steps to strengthen the balance sheet through the restructuring of debt, the sale and
leaseback of the Group’s head office and the equity raise completed in June 2020. At 30 January 2021, the Group held £66.7 million of cash balances.

At 30 January 2021, the Group’s financing arrangements comprised of two facilities, a £107.8 million Revolving Credit Facility maturing in
September 2022, and a £25 million restricted Revolving Credit Facility maturing in January 2022. At year end, neither facility had been drawn down.
On 24 May 2021, the Group successfully refinanced existing debt facilities, reducing the size of the facility to reflect future forecasts for the business.
The existing facilities totalling £132.8 million have been replaced with a £90 million Revolving Credit Facility, reducing to £80 million in January 2022,
before maturing in November 2023. Financial covenants within the facility have been set at levels that reflect past store closures and future levels of
disruption modelled within the Severe but Plausible scenario. The Directors have concluded that this facility provides adequate liquidity and financial
covenant headroom under all downside scenarios described below.

In making the going concern assessment, the Group has modelled a number of scenarios for the period to June 2022. The Base Case scenario
is consistent with the Board approved FY22 Budget. This scenario assumes there are no further lockdowns with a slow return to global economic
recovery. This includes growth assumptions that factor a continued challenge to physical retail, wholesale and licence channels. The Group has
forecast strong growth in the online retail channel driven by a continued customer shift towards online spend compared to pre-Covid preferences,
supported by continued investment in our online platforms and related marketing spend. Total forecast Group sales remain below pre-Covid levels
for the 12 month going concern period with margins returning to pre-Covid levels.

In light of the considerable uncertainty surrounding the ongoing impact of Covid-19, a Severe but Plausible downside scenario has also been
modelled, applying severe but plausible assumptions to the Base Case. This scenario assumes all sales channels, including own stores, online,
wholesale and licence income, are further disrupted throughout the 12 month going concern period. Further, this scenario assumes a two-month
lockdown in December 2021 and January 2022, with a gradual recovery in the months that follow. The Severe but Plausible scenario does not
assume any deterioration in margins and only assumes that directly attributable variable costs are reduced, with all remaining costs in line with the
Base Case. Within the 12 month going concern period, this translates to total turnover that is +23% and -32% against the same period in 2021 and
2020. Under the Severe but Plausible scenario, the Group has adequate liquidity and covenant headroom throughout the going concern period.

112 Ted Baker plc Annual Report and Accounts 2021

In addition, the Directors have performed a Reverse Stress Test, applying further downside trade reductions to the Severe but Plausible scenario
to demonstrate the value of lost sales until financial covenants within the facility signed 24 May 2021 are breached. Liquidity under the facility
is adequate, even under the Reverse Stress Test. In addition to the trade reductions described below, this scenario considers the year-to-date
performance as at the date of the assessment and a reduction to directly attributable variable costs associated with a reduction in turnover. If such
a downside scenario were to materialise, the Directors would consider significant cost savings initiatives around areas such as central and head
office payroll, overhead expenditure, marketing costs, rents, warehousing costs and professional fees. However for the purpose of this analysis,
none of these cost saving efforts are included within the modelling. In the Reverse Stress Test, trade reductions have been gradually applied to all
sales channels during the 12 month going concern period. Store, wholesale and licence income reductions of up to 20% and online reductions of up
to 10% have been applied against the Severe but Plausible scenario. Within the 12 month going concern period, this translates to total turnover that is
+11% and -39% against the same period in 2021 and 2020. In the Reverse Stress Test, the quarterly financial covenant reported in April 2022 would
be the only one impacted during the going concern assessment period, allowing the Directors time to take appropriate actions if there are early signs
of a prolonged reduction in trade.

As a result of the above analysis, the Directors have concluded that the Group has sufficient financial resources to continue in operation and meet
its obligations as they fall due for the 12 months from the date of approval of these financial statements.

b) Basis of consolidation

The consolidated accounts include the accounts of the Company and its subsidiary undertakings made up to 30 January 2021. Unless otherwise
stated, the acquisition method of accounting has been adopted. Under this method, the results of subsidiary undertakings acquired or disposed
of in the period are included in the consolidated financial statements from the date of acquisition or up to the date of disposal.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also
eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with the policies adopted by the Group.

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity. In assessing control, the Group takes into
consideration potential voting rights that are currently exercisable. The acquisition date is the date on which control is transferred to the acquirer.
The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that
control ceases. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes
the non-controlling interests to have a deficit balance.

Jointly controlled entities are those entities over whose activities the Group has joint control, established by contractual agreement and requiring
the ventures’ unanimous consent for strategic financial and operating decisions. Jointly controlled entities are accounted for using the equity method
(equity accounted investees) and are initially recognised at cost.

The consolidated financial statements include the Group’s share of the total recognised income and expense and equity movements of equity
accounted investees, from the date that significant influence or joint control commences until the date that significant influence or control ceases.
When the Group’s share of losses exceeds its interest in an equity accounted investee, the Group’s carrying amount is reduced to £nil and
recognition of further losses is discounted except to the extent that the Group has incurred legal or constructive obligations or made payments on
behalf of an investee.

c) Business combinations

Acquisitions are accounted for using the acquisition method of accounting. The cost of an acquisition is the aggregate of the fair values of the assets
transferred, liabilities incurred or assumed, and equity instruments issued at the date of acquisition. The consideration transferred includes the fair
value of the asset or liability resulting from a deferred or contingent consideration arrangement, unless that arrangement is dependent on continued
employment of the beneficiaries. Costs directly relating to an acquisition are expensed to the income statement. The identified assets and liabilities
and contingent liabilities are measured at their fair value at the date of acquisition. The excess of cost of acquisition over the aggregate fair value of
the Group’s share of the net identified assets plus identified intangible assets is recorded as goodwill.

d) Foreign currency

The consolidated financial statements are presented in Pounds Sterling, which is the Company’s presentation currency.

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the foreign exchange rate ruling at the
date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to functional
currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement.
Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to functional currency at foreign
exchange rates ruling at the dates the values were determined.

Exchange differences arising from a monetary item receivable from or payable to a foreign entity, the settlement of which is neither planned nor
likely in the foreseeable future, are considered to form part of a net investment in a foreign operation and are recognised directly in equity in the
translation reserve.

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to Sterling at
foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations are translated to Sterling at average foreign
exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on retranslation since the transition date are recognised
directly in a separate component of equity. When a foreign operation is disposed of, in part or in full, the relevant amount in the foreign currency
translation reserve is transferred to profit or loss.

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e) Revenue recognition

Revenue represents amounts receivable for goods provided in the normal course of business, net of trade discounts, VAT and other sales related taxes.
The Group also obtains revenue through licences issued to third parties to produce and sell goods using the “Ted Baker” brand name, for which
a royalty is received.

Retail revenue is recognised when a Group entity sells a product to a customer. Wholesale revenue is recognised when title has passed in
accordance with the individual terms of trade. For retail and wholesale revenue, the primary performance obligation is the transfer of goods to the
customer. For retail revenue, this is considered to occur when control of the goods passes to the customer. For store retail revenue, control transfers
when the customer takes possession of the goods in store and pays for the goods. For eCommerce retail revenue, control is considered to transfer
when the goods are delivered to the customer. The timing of transfer of control of the goods in wholesale transactions also depends upon the terms of
trade in the contract. Principally for wholesale revenue, revenue is recognised either when goods are despatched from the Group’s distribution centres,
or when the Group has delivered the goods to the location specified in the contract.

The Group sells retail products with the right of return and historic levels of experience is used to estimate and provide for the value of such returns at
the time of sale when considered significant. Credit notes or exchanges are available to customers returning unwanted products with proof of purchase
within 28 days for online purchases, and 30 days for in-store purchases (14 days in North America), of the date of purchase. Cash refunds are
available to customers returning unwanted products with proof of purchase within 14 days of the date of purchase. Due to the pandemic, during
periods of store closures, the eligible returns period for the UK was extended to allow customers 30 days following the reopening of stores to return
any unwanted items bought from week 46 onwards.

The Group has two classes of contractual licences (or licence partners): product and territorial. Under the terms of the product licence contract, the
Company licences the brand name “Ted Baker” to licence partners, and in return receives a royalty based on a contractually specified percentage
of sales of the product over the contract period. Under the terms of the contract, the Company typically receives a minimum royalty which is invoiced
quarterly in advance and is recognised in the consolidated income statement on a straight-line basis as licence income over the period of the invoice.
Any additional royalties due are accrued as earned based on sales statements received from product licence partners.

Territorial licence partners operate retail stores in overseas locations where the Group typically does not have a geographical presence. The Group
sells inventory to the licence partner at a contractually specified profit margin, and these sales are recognised as wholesale revenue. In some
territories, the Group receives a royalty for use of the brand name by the territorial partner. The royalty earned is similar to that for product licences,
i.e. a fixed contractual minimum royalty and a variable amount based on sales of the territorial partner, with the royalty being recognised as licence
income in the consolidated income statement. The fixed minimum royalty is recognised in the consolidated income statement on a straight-line basis
over the period of the invoice, and the variable amount is accrued as earned based on sales of the territorial partner.

Accrued income is from licence income earned but not billed in the period. There is only one performance obligation for licence income and that is the
contractual use of the brand name in return for a royalty fee.

Sales of gift vouchers are treated as future liabilities, and revenue is recognised when the gift vouchers are redeemed against a later transaction.

f) Pension costs

Contributions payable to defined contribution schemes in respect of pension costs and other post-retirement benefits are charged to the consolidated
income statement in the period to which they relate. Differences between contributions payable in the period and contributions actually paid are
shown as either accruals or prepayments in the balance sheet.

g) Share-based payments

The Group operates an equity-settled share-based compensation plan.

Share options and conditional share awards
Share options granted under the Sharesave scheme are measured at fair value at the date of grant using the Black-Scholes pricing model. Share
options granted under the Ted Baker plc Long-Term Incentive Plan and the Ted Baker Incentive Plan are measured at fair value at the date of grant
using the Monte-Carlo pricing models. The pricing models take into account the terms and conditions of the options/awards vesting. The grant date
fair value is expensed on a straight-line basis over the vesting period (i.e. the period in which the employees become unconditionally entitled to share
options/awards) based on an estimate of shares that will eventually vest.

Where the Company grants options over its own shares to the employees of its subsidiaries, it recognises, in its individual financial statements,
an increase in the cost of investment in its subsidiaries equivalent to the equity-settled share-based payment charge recognised in its consolidated
financial statements with the corresponding credit being recognised directly in equity.

h) Derivatives

The Group holds derivative financial instruments to hedge its foreign currency and interest rate exposures. Derivatives are recognised initially at fair
value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below.

Cash flow hedges
Changes in the fair value of foreign currency and interest rate derivatives which are designated as effective hedges of future cash flows are recognised
in equity in the cash flow hedging reserve and remain there until the forecast transaction occurs. When the hedged item is a non-financial asset, the
amount recognised in equity is transferred to the carrying amount of the asset when it is recognised. In other cases, the amount recognised in other
comprehensive income is transferred to the income statement in the same period that the hedged item affects the income statement.

If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then hedge accounting
is discontinued prospectively. The cumulative gain or loss previously recognised in other comprehensive income remains there until the forecast
transaction occurs.

Changes in the fair value of foreign currency derivatives which are ineffective or do not meet the criteria for hedge accounting are recognised
in the income statement.

114 Ted Baker plc Annual Report and Accounts 2021

i) Taxation

Corporation tax payable is recognised on taxable profits using tax rates enacted or substantively enacted at the balance sheet date. Deferred tax
is recognised in full, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and
their carrying amounts in the consolidated financial statements. However, if the deferred tax arises from initial recognition of an asset or liability
in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss, it is not
accounted for. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date
and are expected to apply when the related deferred tax asset is realised, or the deferred tax liability is settled.

Deferred tax is not recognised for temporary differences relating to investments in subsidiaries to the extent they will not reverse in the
foreseeable future.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences
can be utilised.

Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised
in equity. Income tax comprises current and deferred tax.

j) Dividends

Dividend distribution to the Company’s shareholders is recognised as a liability in the Group and Company financial statements in the period in which
it is declared. For the Company, dividend income from Group undertakings is recognised in the income statement and in the cash flow statement within
operating cash flows.

k) Intangible assets

Intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and impairment losses. Assets acquired as part
of a business combination are recognised at fair value.

Expenditure on development activities is capitalised if the product is technically and commercially feasible and the Group intends and has the
technical ability and sufficient resources to complete development, future economic benefits are probable and if the Group can measure reliably
the expenditure attributable to the intangible asset during its development. Development activities involve a plan or design for the production of new
or substantially improved products or processes. The expenditure capitalised includes direct labour and an appropriate proportion of overheads.
Capitalised development expenditure is stated at cost less accumulated amortisation and less accumulated impairment losses.

Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of intangible assets. Key money is a deposit held
by landlords on taking out a lease which is refundable and is not amortised. Other intangible assets are amortised from the date they are available for
use. The useful life over which the reacquired right is amortised in the post-combination period is based on the remaining contractual term of two years,
without considering any contractual renewals. The estimated useful lives are as follows:

Key money:

Computer software:

No amortisation charged.

Three to ten years.

Computer software under development:

Assets under development are stated at cost less transfers to completed assets when
substantially all of the activities necessary for the asset to be ready for use have occurred.

Reacquired right:

Two years.

l) Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

Depreciation is provided on property, plant and equipment at rates calculated to write off the cost, less estimated residual value, of each asset on the
following bases:

Freehold land:

Freehold buildings:

Leasehold improvements:

Not depreciated.

Straight line over 50 years.

Straight line over the shorter of the period of the unexpired term of the lease or the useful
economic life of the improvement.

Fixtures, fittings and office equipment:

20% to 25% per annum on a straight-line basis apart from computer equipment, which is
33% per annum on a straight-line basis or over the expected useful economic life of the asset.

Motor vehicles:

25% per annum on a straight-line basis over the expected useful economic life of the asset.

Assets under construction:

Assets in the course of construction are stated at cost less transfers to completed assets when
substantially all of the activities necessary for the asset to be ready for use have occurred.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset’s carrying amount is written
down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount and are included in the income statement.

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m) Leases

Under IFRS 16, the Group recognises right-of-use assets and lease liabilities at the lease commencement date, except for short term leases (defined
as leases with a lease term of 12 months or less) and leases of low-value assets. For these leases, the Group recognises the lease payments as an
operating expense on a straight-line basis over the term of the lease.

The lease liabilities are initially measured at the present value of the lease payments that are not yet paid at the commencement date, discounted using
the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses the
incremental borrowing rate as the discount rate and this rate is determined on a portfolio basis, in relation to asset type and location. Judgement is
used in determining the incremental borrowing rate.

The lease liability is presented as a separate line in the consolidated balance sheet. Lease liabilities are subsequently measured at amortised cost and
are increased by the interest charge and decreased by the lease payments made.

The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) when there is a change in future
lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value
guarantee, or as appropriate, changes in the assessment of whether a renewal or purchase option is reasonably certain to be exercised or a break
clause is reasonably certain not to be exercised. Where a lease contract is modified, and the lease modification is not accounted for as a separate
lease, the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised
discount rate at the effective date of the modification.

Where renewal discussions on a lease extension are on-going with the landlord at the lease expiry date, the expired lease is treated as a disposal
and the new lease, after agreement and finalisation, is treated as an addition.

Right-of-use assets are initially measured at cost, which is an amount equal to the corresponding lease liabilities adjusted for any lease payments made
at or before the commencement date, less any lease incentives received. Right-of-use assets are subsequently measured at cost less any accumulated
depreciation and impairment losses, adjusted for certain re-measurements of the lease liabilities. Depreciation is calculated on a straight-line basis
over the expected useful economic life of a lease which is taken as the lease term.

A sale and leaseback transaction is where the Group sells an asset and immediately reacquires the use of the asset by entering into a lease with the
counterparty. A sale is recognised when control of the underlying asset passes to the counterparty. The asset sold is derecognised and a lease liability
and right-of-use asset recognised in relation to the lease. The right-of-use asset arising from the leaseback is measured by reference to the proportion
of the previous carrying amount of the asset that relates to the right of use retained. Any gain or loss arising on the transaction is recognised in the
income statement and relates to the rights transferred to the counterparty.

n) Impairment of property, plant and equipment, right-of-use assets and intangible assets

Assets that are subject to depreciation or amortisation are reviewed for impairment when events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its estimated
recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Recoverable amounts for cash-
generating units are based on value in use, which is calculated from cash flow projections using data from the Group’s budget and three-year plan,
which are approved by the Board.

The key assumptions for the value in use calculations are those regarding discount rates, growth rates and expected changes in margins. Management
use a pre-tax discount rate derived from the Group’s adjusted weighted average cost of capital. Internal forecasts reflect the market assessment and
risks specific to the cash-generating units as at the period end date, as considered in the budgets and forecasts approved by the Board. The discount
rates used were 15.4% for the UK, 15% for Europe, 17.7% for US and 17.5% for Canada. Changes in selling prices and direct costs are based on past
experience and expectations of future changes in the market.

Impairment losses are recognised in the income statement. For the purposes of assessing impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash flows (cash-generating units). Where an impairment loss subsequently reverses, the carrying amount of the asset
is increased to the revised estimate of the recoverable amount, but so that the increased carrying value does not exceed the carrying value that would
have been determined if no impairment loss had been recognised for the asset in prior years. A reversal of an impairment loss is recognised in the
income statement immediately.

o) Investments

Investments in subsidiaries by the Company are shown at cost less accumulated impairment losses which are recognised in the income statement.

p) Inventories

Inventories and work in progress are stated at the lower of cost (or fair value if acquired as part of a business combination) and net realisable value.
Cost includes invoice cost from suppliers and inward transportation costs, including freight and duty costs, incurred in bringing the inventories to the
distribution centres. Where necessary, provision is made to reduce cost to no more than net realisable value having regard to the nature and condition
of inventory, as well as its anticipated utilisation and saleability. The provision is calculated on projected forward sales based on retail season.

q) Trade and other receivables

Trade and other receivables are carried at original invoice amount (which is considered a reasonable proxy for fair value) and are subsequently
held at amortised cost less provision for impairment. The provision for impairment of receivables is based on lifetime expected credit losses, under
the simplified model. Lifetime expected credit losses are calculated by assessing historic credit loss experience, adjusted for factors specific to the
receivable. The movement in the provision is recognised in the Group income statement. See note 16 for further information.

r) Cash and cash equivalents

Cash and cash equivalents comprise cash balances, amounts held by payment processors and overnight money market deposits.

s) Interest-bearing borrowings

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing
borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the
period of the borrowings on an effective interest basis.

116 Ted Baker plc Annual Report and Accounts 2021

t) Finance income and expenses

Net financing costs comprise interest payable on borrowings calculated using the effective interest rate method, interest receivable on funds invested,
dividend income, foreign exchange gains and losses, and gains and losses on hedging instruments that are recognised in the income statement.

Interest income is recognised in the income statement as it accrues, using the effective interest method. Dividend income is recognised in the income
statement on the date the entity’s right to receive payments is established which in the case of quoted securities is usually the ex-dividend date.

u) Segment reporting

A segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues
and expenses that relate to transactions with any of the Group’s other components. All operating segments’ operating results are reviewed regularly
by the Group’s Board to make decisions about resources to be allocated to a segment and assess its performance, and for which discrete financial
information is available (see Note 2).

v) Financial guarantee contracts

Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies within its group. The Company
considers these to be insurance arrangements, and accounts for them as such. In this respect, the Company treats the guarantee contract as
a contingent liability until such time as it becomes probable that the Company will be required to make a payment under the guarantee.

w) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as
a deduction, net of tax, from the proceeds.

x) Significant accounting judgements and estimates

The preparation of the consolidated Group and Company financial statements requires the Group to make estimates and assumptions that affect
the application of policies and reported amounts. Estimates and judgements are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these
estimates. The significant judgements applied in the preparation of the consolidated financial statements, along with estimates and assumptions that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

Key sources of estimation uncertainty
In preparing these financial statements, the Directors have made judgements, estimates and assumptions that affect the application of Group’s
policies and reported amounts of assets, liabilities, revenues and expenses. Estimates and underlying assumptions are reviewed on an ongoing basis.
The Directors consider the following to be the key sources of estimation uncertainty for the Group at the end of the current reporting period due to the
risk of causing a material change to the carrying amount of assets and liabilities within the next year.

Impairment of property, plant and equipment, right-of-use assets and intangible assets
Property, plant and equipment, right-of-use assets and intangible assets are reviewed for impairment if events or changes in circumstances indicate
that the carrying amount may not be recoverable. Management performs an impairment review for each cash-generating unit (CGU) that has
indicators of impairment.

The Directors consider an individual retail store (own stores which includes outlets) to be a CGU, and perform an impairment review if the following
impairment triggers are all met: (i) net book value of the CGU’s assets (comprising of fixtures and fittings, leasehold improvements, IT equipment,
and the right-of-use asset), is greater than £0.25m (2020: £0.25m), (ii) cash contribution for the CGU is less than 10%, and (iii) the store is outside
of a grace period, as stores may be loss making for an initial period of time after opening. For stores within the UK, the grace period is two years,
and for stores outside of the UK, the grace period is three years as the brand is less established in those markets. During the current year, as a result
of the uncertainties arising from Covid-19, management have decided to perform impairment reviews on all stores and override the impairment
exemptions for the grace period and cash contribution exemptions

When a review for impairment is conducted, the recoverable amount of an asset or CGU is determined based on value-in-use calculations using
the Board approved budget and three-year plan at the period end date and are discounted using the weighted average cost of capital. Forecasts
beyond the three-year time period are based on expected GDP rates of growth, with shorter term variations for industry trends and business initiatives,
but in the longer term falling back to expected GDP rates, whilst still reflecting the industry trends of declining in bricks and mortar sales offset by a rise
in eCommerce. Management’s assumptions and estimates, based on the remaining lease length of each store, are used in the value-in-use calculation
for store CGUs. Future events could cause the forecasts and assumptions used in impairment reviews to change with a consequential adverse impact
on the results and net position of the Group as actual cash flows may differ from forecasts and could result in further material impairments in future
years. If the discount rates used were increased by 5%, an additional impairment charge of £1.8m would be recognised. A 5% decrease in the
discount rate would reduce the impairment charge by £0.7m. A 10% reduction in sales, without any management mitigating actions, would increase
the impairment charge by £8.7m.

Carrying amount of inventories
The carrying value of inventory is recorded at the lower of cost and net realisable value. Management calculates inventory provisions based on
forecast sales of stock by season during its lifecycle in determining the level and rates of provisioning required to calculate the net realisable value.
Sales in the fashion industry can be volatile with consumer demand changing significantly based on trends. Accordingly, there is a risk that the cost
of inventory can exceed its net realisable value, with provisioning adjustments being made given management’s knowledge and experience, and
assumptions around consumer demand, fashion trends and macroeconomic factors. Inventory is classified by season, by year, with two seasons per
year i.e. spring/summer and autumn/winter. The provisioning policy is based on reviewing the current physical stock on hand by season and forward
forecasting the expected terminal stock value after two years, reflecting the expected sales levels in all channels. At that point in time, the provision is
calculated, based on the net realisable value of the estimated inventory on hand at that point. The key estimate made under the provisioning policy is
the forecast sales by season by channel of inventory on hand at the period end over the next two years. Future events could cause the forecasts and
assumptions used to change with a consequential adverse impact on the results and net position of the Group as actual sales may differ from forecasts.
This could result in further material adjustments in future years. A 5% increase change in sales would reduce the provision by £2.1m, and a decrease
in sales of 5% would increase the provision by £2.1m.

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Taxation
Deferred tax assets are recognised to the extent it is probable that future taxable profits (including the future release of deferred tax liabilities) will be
available, against which the deductible temporary differences can be utilised, based on management’s assumptions relating to the amounts and timing
of future taxable profits. Estimates of future profitability on an entity basis are required to ascertain whether it is probable that sufficient taxable profits
will arise to support the recognition of deferred tax assets relating to the corresponding entity.

Onerous contract provision
In the period £2.0m has been provided in relation to onerous contracts in relation to materials held by suppliers for cancelled purchase orders due
to the Covid-19 pandemic. This is management’s best estimate of the unavoidable costs in meeting their obligations under these contracts.

Dilapidations provisions
Leasehold dilapidations relate to the estimated cost of returning a leasehold property to its original state at the end of the lease in accordance with the
lease terms. Management use judgement in determining if a provision is required against a leasehold and the cost to be provided based on the floor
area based on previous leasehold exits and external estimates of restoration costs.

Recoverability of trade receivables
Estimates are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables
is required. See note 16 for further information.

Judgements made in applying accounting policies
APMs – Non-underlying items
Non-underlying items are separately reported within their relevant income statement line as the Directors believe that this helps provide a better
indication of the underlying performance of the Group. These measures are consistent with how business performance is measured internally by the
Board and Operating Committee. The profit before tax and non underlying items measure is not a recognised profit measure under IFRS and may not
be directly comparable with adjusted profit measures used by other companies. The classification of adjusting items requires significant management
judgement after considering the nature and intentions of a transaction. Judgement is required in determining whether an item should be classified as
non-underlying or included within underlying results. This assessment covers the nature, the materiality and the recurrence of the item on reported
performance. Reversals of previous non-underlying items are assessed based on the same criteria. Further detail is provided below in Note 3.

Leases
Management exercises judgement in determining the lease term of its lease contracts. Within its lease contracts, break options are included to provide
operational and financial security should store performance be different to expectations. In determining the lease term for contracts that have options
to extend or terminate early, management has applied judgement in determining the likelihood of whether such options will be exercised. This is based
on the length of time remaining before the option is exercisable, performance of the individual store and the trading forecasts. After the commencement
date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to
exercise (or not to exercise) the options to renew (e.g. a change in business strategy). Any reassessment of the lease term will be reflected in
a recalculation of the lease liability and respective right-of-use asset.

The application of IFRS 16 requires judgement around the calculation of the IBR. This is determined by grouping similar leases together and applying
an IBR rate for the group, based on right-of-use assets in a similar economic environment and taking into account the risk-free rate, adjusted for factors
such as credit rating and lease term.

Impairment of property plant and equipment and right-of-use assets
Not normally subjecting stores to impairment whilst they are in their grace period is a judgement made by the Group. In the decision to impair or not,
stores within their grace period as set out earlier are not impaired, as the brand is less established in those markets and stores may be loss making
for an initial period of time after opening. In addition, a judgement is made that stores with a cash contribution greater than 10% do not require
impairments. These judgements have been informed by the Group’s past experience and developed over time. During the current year, as a result
of the uncertainties arising from Covid-19, management have decided to perform impairment reviews on all stores and override the impairment
exemptions for the grace period and cash contribution exemptions.

Impairment of investments in subsidiary undertakings, joint ventures and associated debtor balances
Management review the carrying value of the investment in subsidiary undertakings and joint ventures for impairment in accordance with IAS 36.
Judgement is used in assessing whether there has been a trigger event showing a potential decline in the value of the investment. These may include
evidence of financial difficulty or significance in underperformance against expectations, or potential restrictions in its local market. If such a trigger
is identified, a review for impairment is conducted, with the recoverable amount of the asset being determined based on value-in-use calculations
using approved forecasts/budget at the period end date and discounted using the weighted average cost of capital. The future forecasts are
inherently judgmental, and the key sensitivity includes achieving the growth rates for a particular region or branch and relevant to the specific market.
A change in these assumptions will impact the future forecasts and management’s assessment of the profitability of each entity/CGU. Intercompany
receivables and amounts due from joint ventures are also reviewed for investments. The surplus of the net asset investment over the value-in-use
calculation is compared to the outstanding receivable and a provision is made for any shortfall.

During the current year, as a result of the uncertainties arising from Covid-19, management have decided to perform impairment reviews on all group
investments in subsidiaries and a recoverability assessment on associated debtor balances.

Further significant loan loss and impairment charges may be recorded in the future dependent on actual performance compared to the Group’s Plan.

118 Ted Baker plc Annual Report and Accounts 2021

y) Changes in accounting estimates, errors or misstatements

Changes in accounting estimates
In the prior accounting period, our inventory accounting basis of estimating inventory cost included certain logistics and freight costs in getting stock
from the distribution centre to its final location. The Directors now believe that this basis of estimating is not suitable due to an increasingly multi-channel
business in which purchases may reach the consumer through a variety of different routes. As a result of these changes, the estimation of costs relating
to this has become less reliable. The amount capitalised in respect of these costs at 26 January 2020 was £6.1m which has been expensed in the
current period with no similar amounts capitalised in the 53 weeks ended 30 January 2021.

Flagship stores
In previous accounting periods flagship stores were considered corporate assets and were considered to support the wider business in the geographic
territory in which that store was located. The Directors now believe that this treatment is not suitable due to an increasingly multi-channel business which
has reduced the significance of flagship stores. Therefore, the impairment estimation basis has been revised in the current period to align it with the
remainder of the store portfolio. This has resulted in an impairment in the period of £1.9m.

IFRS 16 – rent concessions
The Group has applied the practical expedient for the application of rent concessions provided as a response to the Covid-19 pandemic, as allowed by
the amendment to IFRS 16. The Group has applied the practical expedient to all its leases within Europe that meet the criteria set out in the amendment.
The Group has not applied the practical expedient to concessions in the rest of world. £0.4m has been recognised in the income statement in the
period to reflect these lease concessions to which the practical expedient has been applied.

Errors or misstatements
IFRS 16 prior year adjustments identified in the current year
ɫ Incorrect classification of lease incentives – £13.3m

During the prior period £10.2m of creditor balances relating to lease incentives were taken to reserves as an IFRS 16 adjustment, when they
should have been offset against the right-of-use asset for the lease they relate to. In addition, £3.1m of lease incentives were held in other creditors
at transition, when they should have been offset against the right-of-use asset for the lease they relate to.

Accordingly, £13.3m has been corrected retrospectively by restating the right-of-use asset, other creditors has been restated by £3.1m and
retained earnings by £10.2m on the balance sheet as at 25 January 2020. There was no impact on earnings for the period or EPS.

ɫ Incorrect impairment of assets – £2.2m

At 25 January 2019 the impairment of right-of-use assets was overstated as a result of the above incorrect classification.

Accordingly, the £2.2m impact has been corrected retrospectively by restating the income statement for the period to 25 January 2020 and the
corresponding increase to right-of-use assets and retained earnings.

Tangible and intangible fixed assets prior year adjustment identified in the current year
ɫ In prior years, computer software with a cost of £8.4m and related accumulated depreciation of £3.7m was incorrectly shown as part of tangible
fixed assets. Subsequent depreciation charges in respect of this computer software were expensed against intangible fixed assets. At 26 January
2019 and 25 January 2020, these assets were fully depreciated and no longer in use. To correct this error, tangible fixed assets have been
restated by cost of £8.3m and depreciation of £3.7m in note 12 and by restatement of depreciation of £4.7m in intangible fixed assets in note 11
to correct this mis-classification at 26 January 2019 and 25 January 2020.

Inventory adjustments identified in the prior year
ɫ Adjustments to the carrying amount of inventory at 26 January 2019 – £20.2m

As previously described in the Annual Report 2020, in December 2019 the Group identified that the value of inventory held on its balance
sheet at that time had been overstated following an internal review. As a result of these findings, the Group engaged Deloitte LLP to undertake
an independent review of this issue.

Following the conclusion of Deloitte’s review and the completion of the year-end process and audit, the Group restated the balance of inventory
at 26 January 2019 from £225.8m to £205.6m, a £20.2m restatement. The restatement was due to inappropriate cost values being attributed
to inventory, inventory reflected on the balance sheet which did not physically exist and intercompany profit in stock that was not adjusted for in
previous calculations.

The treatment for the items identified from the inventory review were classified as changes in accounting estimates or errors or misstatements, and
is governed by IAS 8 ‘Accounting policies, changes in accounting estimates and errors’.

ɫ Stock that did not physically exist – £6.5m

The adjustments primarily related to inventory held in system locations that were not subject to inventory counts and were not written off despite not
physically existing. These balances primarily arose as stock were moved between warehouses, between retail and outlet stores and warehouses
over seasons, and due to weaknesses in the control environment over those moves and stock locations.

ɫ Adjustments to correct calculations – £13.7m

Adjustments were identified to correct calculations, including to correct for the capitalisation of duties that should not have been capitalised
to inventory, and to eliminate parts of intercompany profit in stock that was not adjusted for in previous calculations.

In addition, the Group reviewed its approach to estimating the carrying value of stock and adopted a more prudent methodology which resulted
in a £32.4m reduction in stock value, being accounted for as a change in estimate booked as a non-underlying expense in the income statement for
the 52 weeks ended 30 January 2020. The Group also changed its stock provisioning policy from one based on provisioning against seasons to one
based on forward forecasting the expected terminal stock value at the point at which the stock has traded through its expected lifecycle of two years.
The impact of the increase in the obsolescence provision of £13.5m was included within non underlying costs.

z) Provisions

Provisions are recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event and it is probable
that an outflow of economic benefits will be required to settle the obligation. Provisions are measured at the Directors’ best estimate of the expenditure
required to settle the obligation at the balance sheet date. Where the effect is material, the provision is determined by discounting the expected future
cash flows at a pre-tax rate which reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

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aa) Government schemes

Grants are recognised only when there is reasonable assurance that the Group will comply with the conditions attached to them and that the grants
will be received. Grants that are receivable as compensation for expenses already incurred are recognised in profit or loss in the period in which they
become receivable.

ab) Alternative performance measures

In the reporting of financial information, the Group uses certain measures that are not separately disclosable under IFRS or the Companies Act.
The Directors believe that these additional measures, which are used internally, are useful to the users of the financial statements in helping them
understand the underlying business performance. Non-underlying items are those items which, in the opinion of the Directors, should be excluded
in order to provide a consistent and comparable view of the underlying performance of the Group’s ongoing business and are considered by the
Directors to be significant. The Directors also exclude foreign exchange gains and losses on the translation of intercompany monetary assets and
liabilities denominated in foreign currencies.

Non-underlying items are added back/deducted to derive certain alternative performance measures as follows:

ɫ profit attributable to the owners of the Company, to arrive at underlying earnings per share (after the tax effect of non-underlying items); and

ɫ profit before tax, to arrive at profit before tax and non-underlying items.

The Directors believe the alternative performance measures presented along with comparable GAAP measurements is useful to provide information
with which to measure our performance, and our ability to invest in new opportunities. Management uses these measures with the most directly
comparable GAAP financial measures in evaluating our operating performance and value creation. Alternative financial measures should not be
considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP. The requirements for identifying
non-underlying items are on a consistent basis each period and presented consistently, and a reconciliation of profit before tax and non-underlying
items to profit before tax is included in Note 3 to the financial statements.

The profit before tax and non-underlying items and underlying earnings per share are not recognised measures under IFRS and may not be directly
comparable with adjusted profit and earnings per share measures used by other companies (see Note 9).

Constant currency comparatives are obtained by applying the exchange rates that were applicable for the period ended 25 January 2020 to the
financial results in overseas subsidiaries for the 53 weeks ended 30 January 2021 to remove the impact of exchange rate fluctuations.

120 Ted Baker plc Annual Report and Accounts 2021

SEGMENT INFORMATION

The Group has three reportable segments: retail, wholesale and licensing. For each of the three segments, the Executive Committee (considered to be
the Chief Operating Decision Maker) reviews internal management reports on a four-weekly basis.

The accounting policies of the reportable segments are the same as those used in the preparation of the group financial statements. Information
regarding the results of each reportable segment is included below. Performance for the retail segment is measured based on operating contribution,
whereas performance of the wholesale segment is measured based on gross profit and performance of the licensing segment is measured based
on royalty income, as included in the internal management reports that are reviewed by the Board.

Segment results before non-underlying items are used to measure performance as management believes that such information is the most relevant
in evaluating the performance of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined
on an arm’s length basis.

a) Segment revenue and segment result

53 weeks ended 30 January 2021

Revenue

Cost of sales

Gross profit before non-underlying items

Operating costs

Retail
£’000

254,256

(108,102)

146,154

(165,458)

Wholesale
£’000

85,278

(53,169)

32,109

–

Operating (loss)/contribution before non-underlying items

(19,304)

32,109

Reconciliation of segment result to loss before tax

Licensing
£’000

12,449

–

12,449

–

12,449

Segment result before non-underlying items

(19,304)

32,109

12,590

Other operating costs

Other operating income

Operating loss before non-underlying items

Finance income

Finance expense

Share of losses from joint ventures

Loss before tax and non-underlying items

Non-underlying items before tax

Loss before tax

Capital expenditure

Unallocated capital expenditure

Total capital expenditure

Additions to right-of-use assets

Total capital expenditure and additions to right-of-use assets

Depreciation and amortisation

Unallocated depreciation and amortisation

Depreciation of right-of-use assets

Total depreciation and amortisation

Segment assets

Property, plant and equipment – central

Intangible assets – central

Deferred tax assets

Income tax receivable

Inventories – central

Cash – central

Other receivables central

Unallocated assets1

Total assets

Segment liabilities

Central liabilities

Current tax payable

Unallocated liabilities2

Total liabilities

Net assets

–

3,432

–

(7,493)

(206)

–

239,491

75,630

–

(214,035)

(28,341)

–

Total
£’000

351,983

(161,271)

190,712

(165,458)

25,254

(81,421)

6,488

(49,679)

399

(8,745)

(1,136)

(59,161)

(48,568)

(107,729)

3,432

3,549

6,981

9,229

16,210

(7,699)

(26,763)

(20,393)

(54,855)

315,121

2,279

34,491

27,635

7,983

3,107

2,344

609

5,689

399,258

(242,376)

(1,045)

(2,607)

(1,194)

(247,222)

152,036

1 Other assets include prepayments, derivatives and central allocations of inventory, cash and cash equivalents and other receivables.

2 Other liabilities include derivatives and central allocations of trade and other payables and borrowings.

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Segment Information continued

52 weeks ended 25 January 2020 (Restated)3

Revenue

Cost of sales

Gross profit before non-underlying items

Operating costs

Operating contribution before non-underlying items

Reconciliation of segment result to profit before tax

Retail
£’000

439,941

(176,520)

263,421

(232,175)

31,246

Wholesale
£’000

171,536

(103,199)

68,337

–

68,337

Licensing
£’000

19,001

–

19,001

–

19,001

Segment result before non-underlying items

31,246

68,337

19,001

Other operating costs

Other operating income

Operating profit before non-underlying items

Finance income

Finance expense

Share of losses from joint ventures

Profit before tax and non-underlying items

Non-underlying items before tax

Loss before tax

Capital expenditure

Unallocated capital expenditure

Total capital expenditure

Additions to right-of-use assets

Total capital expenditure and additions to right-of-use assets

Depreciation and amortisation

Unallocated depreciation and amortisation

IFRS 16 Depreciation

Total depreciation and amortisation

Segment assets

Property, plant and equipment – central

Intangible assets – central

Right-of-use assets – central

Deferred tax assets

Income tax receivable

Investment in equity accounted investee

Amounts due from equity accounted investee

Other assets1

Total assets

Segment liabilities

Lease liability – central

Deferred tax liability

Other liabilities2

Total liabilities

Net assets

–

13,610

–

515

–

(14,394)

(595)

–

326,703

94,513

–

(333,557)

(75,989)

–

1 Other assets include prepayments, derivatives and central allocations of inventory, cash and cash equivalents and other receivables.

2 Other liabilities include derivatives and trade and other payables and borrowings.

3 Details of the restatement can be found in Note 1y).

–

Total
£’000

630,478

(279,719)

350,759

(232,175)

118,584

(100,294)

144

18,434

138

(12,565)

(1,229)

4,778

(82,403)

(77,625)

14,125

11,698

25,823

12,473

38,296

(14,989)

(13,911)

(38,048)

(66,948)

421,216

67,996

42,603

21,347

17,638

2,343

5,088

4,462

7,202

589,895

(409,546)

(29,665)

(3,588)

(6,423)

(449,222)

140,673

122 Ted Baker plc Annual Report and Accounts 2021

Segment Information continued

b) Geographical information

53 weeks ended 30 January 2021
Revenue
Non-current assets1

52 weeks ended 25 January 2020 (Restated)3
Revenue
Non-current assets1

1 Non-current assets exclude deferred tax assets and investment in associates.
2 Rest of the World includes Europe, Canada, Asia (up to disposal) and South Africa.
3 More details of the restatement are shown in note 1y).

c) Revenue by collection1

Menswear1
Womenswear1

1 Revenue by collection includes retail and wholesale revenue and excludes licence income.

d) Retail revenue

Stores
eCommerce

LOSS BEFORE TAX

Loss before tax is stated after charging/(crediting):

Depreciation and amortisation2
Non-underlying items (further detail below)
Leasehold properties:
Variable rental payments3
Concessions:
Minimum contract payments3
Variable rental and commission payments3
Loss on sale of property, plant and equipment and intangibles
Practical expedient on IFRS 16 application
Government schemes4
Close out of foreign exchange hedge contracts
Gain on lease modifications

Auditors’ remuneration:
Audit of these financial statements
Amounts receivable by the Company’s auditors and their associates in respect of:
Audit of financial statements of subsidiaries of the Company

Interim financial statements review

Other statutory auditors
Other assurance services

UK
£’000

US
£’000

Rest of the World2
£’000

Total
£’000

215,756
136,641

360,281
194,550

102,787
16,214

194,599
65,057

33,440
3,604

75,598
48,708

351,983
156,459

630,478
308,315

53 weeks ended
30 January 2021
£’000

52 weeks ended
25 January 2020
£’000

119,790

219,744
339,534

241,098

370,379
611,477

53 weeks ended
30 January 2021
£’000

52 weeks ended
25 January 2020
£’000

109,402
144,854
254,256

321,214
118,727
439,941

53 weeks ended
30 January 2021
£’000

53,109
48,568

52 weeks ended
25 January 2020
(Restated)1
£’000

64,527
82,403

1,728

5,429

3,621
39,325
933
(361)
(10,545)
(6,916)
(2,992)

150

754
130
73
–

9,235
36,222
447
–
–
–
–

1,600
20
37
17

1 The restatement relates to the prior year stock misstatement (see Note 1y)).
2 The Group has applied IFRS 16. Depreciation of right-of-use asset of £26,763,000 (2020: £34,048,000) has been included within £53,129,000 above (2020: £64,527,000).
The depreciation charge above excludes the amortisation within Note 10 of the reacquired right of £1.7m (2020: £1.9m). 2020 also excludes £0.5m depreciation charge for
the closure of the outlet store in Italy. These charges are included within non-underlying costs below.

3 Disclosed above are the variable rentals charged relating to leasehold properties and fixed and variable rentals charged in relation to concession arrangements. These are

either fixed in nature or variable based on revenue levels for a particular store or concession, where relevant, including eCommerce sales with concession partners not meeting
the definition of a lease under IFRS 16.

4 Support received from governments around the world to support businesses throughout the Covid-19 epidemic. Payments from the UK government for furloughed employees

amounted to £8,460,000.

Ted Baker plc Annual Report and Accounts 2021

123

FINANCIALSTATEMENTS
d
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u
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n
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s
t

n
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m
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t

t
s

i
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n
a
n
fi

e
h

s
e
t

o
N

Loss Before Tax continued

Reconciliation of profit before tax to profit before tax and non-underlying items

Loss before tax

Non-underlying items

Included in cost of sales:

Inventory changes in estimates

Change to inventory obsolescence provision

Onerous contract provision

Other

Included in gross profit

Included in distribution costs:

(Loss) on disposal of business

Impairment of intangibles, property, plant and equipment and right-of-use assets

Other closure costs

Included in administrative costs:

Acquisition costs and unwind of fair value accounting adjustments

Reorganisation, restructuring costs and other legal and professional costs

Included in other operating loss:

Gain on sale and leaseback of head office

Included in operating loss

Included in share of post-tax profits from joint venture:

Unwind of fair value adjustments

Included in finance income/(expense):

53 weeks ended
30 January
2021
£’000

Notes

52 weeks ended
25 January
2020
(Restated)1
£’000

(107,729)

(77,625)

(6,065)

–

(1,973)

(7,957)

–

(45,303)

–

(1,987)

(11,415)

17,446

(49,216)

(32,351)

(13,539)

–

2,221

(43,669)

(7,585)

(13,969)

(603)

(4,710)

(7,852)

–

(78,388)

(7)

(989)

655

(48,568)

(59,161)

(3,026)

(82,403)

4,778

Foreign exchange on the translation of monetary assets and liabilities denominated in foreign currencies

Non-underlying items

(Loss)/profit before tax and non-underlying items

Notes

1 Further details surrounding the changes in accounting estimates for inventory can be found in Note 1y).

2 Changes to inventory obsolescence provision are detailed in note 1y).

3 Details of the onerous contract provision can be found in note 1y).

4 In the prior period the Group reorganised operations in Asia (Hong Kong, China and Japan), which resulted in a loss on disposal.

5 The Group impaired a number of assets resulting in a charge of £45.3m (2020: £14.0m), including key money, leasehold improvements and right-of-use assets.

6 Charges in the current and prior period relate to amortisation of reacquired rights, fair value and accounting adjustments in relation to the acquisition of the footwear business

in financial year 2019.

7 A number of costs were incurred during the year, relating to the restructuring and reorganisation of the business. These include:

a. £3.7m (2020: £nil) for redundancy costs

b. £5.3m (2020: £2.2m) for restructuring costs

c. £Nil (2020: £2.7m) for stock investigation

d. £Nil (2020: £1.4m) for investigations into the allegations of misconduct of the former CEO

e. £2.5m (2020: £1.6m) for other legal and professional fees.

8 Relates to the sale of the corporate head office building.

9 Foreign exchange loss on re-translation of intercompany balances denominated in foreign currencies.

1 More details of the restatement are shown in note 1y).

124 Ted Baker plc Annual Report and Accounts 2021

4 OTHER OPERATING INCOME AND EXPENSES

Close out of foreign exchange hedge contracts

Gain on sale and leaseback of head office

Other

Loss on disposal of fixed assets

53 weeks ended
30 January
2021
£’000

52 weeks ended
25 January
2020
£’000

6,916

17,446

505

24,867

(933)

23,934

–

591

(447)

144

The close out of foreign exchange hedge contracts is the gain from the early termination of forward contracts during the year that were taken out to
hedge the purchase of inventory. These inventory orders were cancelled and as a result the contracts were no longer required. The company took
advantage of the favourable sterling dollar exchange rate at the time to close the contracts and record a gain.

A net gain of £17.4 million on the sale and leaseback transaction of UBB has been recorded as the Group sold UBB and immediately reacquired the
use of the asset by entering into a lease with the landlord. The head office property has been derecognised on completion of the sale and a lease
liability and right-of-use asset recognised in relation to the leaseback.

FINANCE INCOME AND EXPENSES

Finance income

– Interest receivable

– Foreign exchange gains

Finance expenses

– Interest payable

– Interest on lease liabilities

– Foreign exchange losses

53 weeks ended
30 January
2021
£’000

52 weeks ended
25 January
2020
£’000

960

1,054

(1,964)

(6,781)

–

138

–

138

(4,256)

(8,309)

(3,026)

(8,745)

(15,591)

Ted Baker plc Annual Report and Accounts 2021

125

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STAFF NUMBERS AND COSTS

The average number of employees (including Executive Directors) was:

Sales

Design

Administration

Their aggregate remuneration comprised:

Wages and salaries

Share-based payment charge

Social security costs

Pension costs

53 weeks ended
30 January
2021
Number

52 weeks ended
25 January
2020
Number

1,910

624

2,596

2,800

745

3,622

£’000

57,147

1,204

6,515

1,412

91,162

225

9,563

2,230

66,278

103,180

The remuneration figures above are shown net of £10,545,000 received under government Covid support schemes.

Directors’ remuneration

Executive Directors’ remuneration

Non-Executive Directors’ remuneration

Company contributions to Executive Directors’ money purchase pension plans

53 weeks ended
30 January
2021
£’000

52 weeks ended
25 January
2020
£’000

857

432

734

358

The aggregate of remuneration and amounts receivable under long-term incentive schemes of the highest paid Director was £591,000
(2020: £398,000).

No amounts were paid in relation to pension contributions to a money purchase scheme during the period ended 30 January 2021 or the period
ended 25 January 2020. Payments in lieu of pension were made to Rachel Osborne and David Wolffe during the period totalling £13,639
(2020: £5,161) and £7,865 (2020: £nil).

INCOME TAX EXPENSE

a) The tax charge comprises:

Current tax

United Kingdom corporation tax

Overseas tax

Deferred tax

United Kingdom corporation tax

Overseas tax

Prior period under/(over) provision

Current tax

Deferred tax

126 Ted Baker plc Annual Report and Accounts 2021

53 weeks ended
30 January
2021
£’000

52 weeks ended
25 January
2020
£’000

(180)

(1,275)

(7,129)

(10,737)

(6,113)

4,150

(21,284)

–

1,804

(4,152)

(5,430)

(414)

(1,247)

(9,439)

Income Tax Expense continued

b) Current year deferred tax movement by type

Property, plant & equipment

Share-based payments

Losses

Inventory

Other

53 weeks ended
30 January
2021
£’000

52 weeks ended
25 January
2020
£’000

5,306

(3)

7,929

147

4,487

1,024

(25)

4,906

329

4,593

17,866

10,827

c) Factors affecting the tax charge for the period

The tax assessed for the period is higher than the tax calculated at the UK prevailing corporation tax rate of 19%. The differences are explained below.

Loss before tax

Loss multiplied by the standard rate in the UK – 19% (2020: standard rate in the UK of 19%)

Income not taxable/expenses not deductible for tax purposes

Overseas losses not recognised

Withholding tax expensed

Chargeable gain on disposal

Movement in current and deferred tax on share awards and options

Prior period over provision

Recognition of losses previously not recognised

Effect of rate change on deferred tax

Difference due to overseas tax rates

Total income tax credit

53 weeks ended
30 January
2021
£’000

52 weeks ended
25 January
2020
£’000

(107,729)

(20,469)

(3,847)

5,313

505

3,299

180

(1,775)

(20)

166

(4,636)

(21,284)

(79,856)

(15,173)

8,280

4,402

–

(1,707)

(5,466)

(950)

1,140

(9,439)

The tax charge for the current year includes a credit of £2,135,000 in respect of non-underlying items. This arises from deductible items, primarily in the
UK, on the gain on sale and leaseback of the head office and IFRS 16 impairments.

d) Deferred and current tax recognised directly in equity

Deferred tax (credit)/charge on share awards and options

Deferred tax (credit)/charge associated with movement in hedging reserve

Deferred tax (credit)/charge associated with foreign exchange movements in reserves

53 weeks ended
30 January
2021
£’000

52 weeks ended
25 January
2020
£’000

(20)

(6)

(587)

(613)

(22)

173

176

The March 2020 Budget announced that a rate of 19% would continue to apply with effect from 1 April 2020 and this was substantively enacted
on 17 March 2020.

As the deferred tax assets and liabilities should be recognised based on the corporation tax rate at which they are anticipated to unwind, the assets
and liabilities on UK operations have been largely recognised at a rate of 19% (2020: 17%). Assets and liabilities arising on foreign operations have
been recognised at the applicable overseas tax rates.

The March 2021 Budget announced a further increase to the main rate of corporation tax to 25% from April 2023. This rate has not been substantively
enacted at the balance sheet date, as a result UK deferred tax balances as at 30 January 2021 continue to be measured at 19%. If all of the UK
deferred tax was to reverse at the amended rate the impact to the closing deferred tax position would be to increase the deferred tax asset by
£1.7 million.

Ted Baker plc Annual Report and Accounts 2021

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PROFIT ATTRIBUTABLE TO TED BAKER PLC

The profit after tax for the 53 weeks ended 30 January 2021 of Ted Baker plc, the parent company, was £157,000 (2020: loss of £5,590,000).
This included non-underlying costs of £nil (2020: £4,830,000) which related to various legal and professional costs disclosed in note 3. The profit
after tax before non-underlying items for the 53 weeks ended 30 January 2021 was £157,000 (2020: loss of £1,703,000). The Directors have
approved the income statement for the parent company.

DIVIDENDS PER SHARE

Final dividend paid for prior period of nil p per ordinary share (2020: 40.7p)

Interim dividend paid of nil per ordinary share (2020: 7.8p)

53 weeks ended
30 January
2021
£’000

52 weeks ended
25 January
2020
£’000

–

18,138

3,477

21,615

The Directors have temporarily suspended the dividend, and hence no final dividend is proposed for the period ended 30 January 2021.

10 EARNINGS PER SHARE

Number of shares:

Weighted number of ordinary shares outstanding

Effect of dilutive options3

Weighted number of ordinary shares outstanding – diluted

Earnings:

Loss for the period basic and diluted

Underlying (loss)/profit2

Basic loss per share

Underlying (loss)/earnings per share2

Diluted loss per share

Underlying diluted (loss)/earnings per share2

53 weeks ended
30 January
2021
Number

52 weeks ended
25 January
2020
(Restated)1
Number

153,941,467

44,565,753

5,293,825

48,391

159,241,292

44,614,144

£’000

(86,445)

(40,012)

(56.2p)

(26.0p)

(56.2p)

(26.0p)

(68,186)

2,974

(153.0p)

6.7p

(153.0p)

6.7p

Due to the loss-making position at the year end, all potential ordinary shares are considered to be antidilutive.

1 More details of the restatement are shown in note 1y).

2 Underlying profit for the period and underlying earnings per share is shown before non-underlying items.. Non-underlying items net of tax were £46,433,000

(2020: £71,160,000).

3 Diluted earnings per share and adjusted diluted earnings per share have been calculated using additional ordinary shares of 5p each available under the Ted Baker Sharesave

Scheme and the Ted Baker plc Long Term Incentive Plan 2013.

128 Ted Baker plc Annual Report and Accounts 2021

INTANGIBLE ASSETS

Cost

At 25 January 20201

Additions

Transfers

Exchange rate movement

At 30 January 2021

Amortisation

At 25 January 20201

Charge for the period

Impairments

Exchange rate movement

At 30 January 2021

Net book value

At 30 January 2021

At 25 January 2020

1 More details of the restatement are shown in note 1y).

Cost

At 26 January 2019

Additions

Transfers

Exchange rate movement

At 25 January 2020

Amortisation

At 26 January 2019

Prior period restatement1

At 26 January 2019 as restated

Charge for the period

Exchange rate movement

At 25 January 2020

Net book value

At 25 January 2020

At 26 January 2019

Reacquired right
£’000

Key money
£’000

Computer
software
£’000

Computer software
under development
£’000

3,781

617

55,607

–

5,057

(154)

3,781

617

60,510

2,035

1,746

–

3,781

–

1,746

–

653

(36)

617

–

617

13,885

13,509

–

(74)

27,320

33,190

41,722

2,879

3,692

(5,057)

1,568

–

1,568

2,879

Reacquired right
£’000

Key money
£’000

Computer
software
(Restated)
£’000

Computer software
under development
£’000

3,781

–

3,781

145

–

145

1,890

–

2,035

1,746

3,636

633

–

(16)

617

–

617

633

47,957

–

7,636

55,607

12,700

(4,699)

8,001

5,876

13,885

41,722

39,956

4,147

6,368

(7,636)

–

2,879

–

2,879

4,147

Total

62,884

3,692

–

(100)

66,476

15,920

15,255

653

(110)

31,718

34,758

46,964

Total

56,518

6,368

–

(2)

62,884

12,845

(4,699)

8,146

7,766

15,920

46,964

48,372

1 More details of the restatement are shown in note 1y).

Amounts included within computer software relate to the Group’s information technology and ERP systems and further development of our eCommerce
platforms and other business systems. The computer software under development category is stated net of transfers to computer software. Internally
capitalised costs amount to £nil (2020: £718,000).

Transfers from the computer software under development category in the period amounted to £5,057,000 (2020: £7,636,000) while additions into
this category were £3,692,000 (2020: £6,368,000).

Ted Baker plc Annual Report and Accounts 2021

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12 PROPERTY, PLANT AND EQUIPMENT

Freehold land
and buildings
£’000

Leasehold
improvements
£’000

Fixtures, fittings
and office
equipment
(Restated)
£’000

Motor
vehicles
£’000

Assets under
construction
£’000

Cost

At 25 January 20201

57,973

126,687

104,871

Total
£’000

291,166

3,289

–

(7,228)

(72,320)

(1,514)

213,393

168,436

12,857

(6,903)

(11,002)

12,143

(1,539)

173,992

1,524

3,289

(3,986)

–

849

–

Total
£’000

292,426

(8,384)

284,042

19,455

(12,380)

3,248

–

3,248

(1,997)

210

1,524

291,166

–

160,561

(3,685)

156,876

21,134

(10,806)

1,281

(49)

168,436

111

–

(2)

–

109

108

–

111

–

111

–

111

108

–

108

–

Additions

Transfers

Write-offs

Disposals

Exchange rate movement

At 30 January 2021

Depreciation

At 25 January 2020

Charge for the period

Write-offs

Disposals

Impairment

Exchange rate movement

At 30 January 2021

Net book value

At 30 January 2021

At 25 January 2020

–

(57,973)

–

1,827

192

–

(2,019)

–

56,146

–

212

(3,240)

(6,369)

(1,539)

–

3,774

(3,988)

(7,976)

115,751

96,684

84,441

82,060

7,554

(3,037)

(6,281)

7,142

(1,309)

5,111

(3,866)

(2,703)

5,001

(230)

88,510

85,373

109

27,241

42,246

11,311

22,811

–

849

1,524

39,401

122,730

1 More details of the restatement are shown in note 1y).

Write-offs relate to assets no longer used in the business.

Freehold land
and buildings
£’000

Leasehold
improvements
£’000

Fixtures, fittings
and office
equipment
£’000

Motor
vehicles
£’000

Assets under
construction
£’000

Cost

At 26 January 2019

Prior period restatement1

57,973

129,351

–

At 26 January 2019 as restated

57,973

129,351

101,743

(8,384)

93,359

14,624

(2,802)

(310)

–

6,828

(9,788)

296

57,973

126,687

104,871

1,379

–

1,379

448

–

82,580

–

82,580

9,225

(8,385)

744

277

76,494

(3,685)

72,809

11,461

(2,421)

537

(326)

Additions/transfers

Disposals

Exchange rate movement

At 25 January 2020

Depreciation

At 26 January 2019

Prior period restatement1

At 26 January 2019 as restated

Charge for the period1

Disposals2

Impairment

Exchange rate movement

At 25 January 2020

Net book value

At 25 January 2020

At 26 January 2019

1,827

84,441

82,060

108

56,146

56,594

42,246

46,771

22,811

20,550

1,524

3,248

122,730

127,166

1 More details of the restatement are shown in note 1y).

Transfers from the assets under construction category in the period amounted to £3,986,000 (2020: £1,997,000) while additions into this category
were £3,289,000 (2020: £19,455,000).

Details on the impairment of property, plant and equipment is shown in Note 1.

130 Ted Baker plc Annual Report and Accounts 2021

INVESTMENTS (COMPANY)

a) Subsidiary undertakings

On 30 June 2020, the Group disposed of its wholly owned subsidiary Big Lobster Limited.

As at 30 January 2021 and 25 January 2020, the Company and Group had shares in the following subsidiary undertakings:

Address

Principal activity

Holding
ordinary shares

100%

Design, wholesale and retail
of designer clothing and
accessories

Subsidiary undertaking

Country of
incorporation
and operation

No Ordinary Designer Label Ltd*

Ted Baker Limited

Ted Baker Canada Inc.

Canada

Ted Baker (France) SARL

France

Ted Baker Spain S.L.

Spain

Ted Baker Netherlands B.V.

The Netherlands

Ted Baker Germany GmbH

Germany

Ted Baker Belgium N.V.

Belgium

Ted Baker Italy S.r.l.

Italy

Ted Baker SA (Pty) Ltd

South Africa

Ted Baker Japan KK

Japan

Little Lobster Limited

*Held directly by Ted Baker plc.

The Ugly Brown Building
6a St Pancras Way
London
NW1 0TB
United Kingdom

1072 North State Street
Ukiah, California
95482
USA

1959 Upper Water Street
Halifax, Nova Scotia
Canada
B3J 3E5

c/o Regus
9 Rue du 4 Septembre
75002 Paris
France

c/Arturo Soria
263B
28033
Madrid
Spain

Leidsestraat 64 Amsterdam
1017PD
The Netherlands

c/o Regus
Maximilianstraße 35
Eingang A
80539
Munich
Germany

Huidevettersstraat 42a
2000
Antwerpen
Belgium

Retail and wholesale of
designer clothing and
accessories

100%

Retail of designer clothing
and accessories

100%

Retail of designer clothing
and accessories

100%

Retail of designer clothing
and accessories

100%

Retail of designer clothing
and accessories

100%

Milano (MI) Via Michelangelo
Buonarroti 39 Cap. 20145
Italy

Building 5 Inanda Greens Business Park,
54 Wierda Rd
Westwierda Valley
Sandton
2146
South Africa

Retail of designer clothing
and accessories

4-25-14, Jingumae
Shibuya-Ku,
Tokyo, Japan

The Ugly Brown Building
6a St Pancras Way
London
NW1 0TB
United Kingdom

Retail of designer clothing
and accessories

Dormant

100%

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Investments (Company) continued

Subsidiary undertaking

Country of
incorporation
and operation

No Ordinary Shoes Limited

No Ordinary Shoes USA LLC

Ted Baker Korea Yuhan Hoesa

Korea

Address

Principal activity

Holding
ordinary shares

The Ugly Brown Building
6a St Pancras Way
London
NW1 0TB
United Kingdom

1072 North State Street
Ukiah, California
95482
USA

Seoul Finance Center
Level 21
136 Sejong-daero
Jung-gu
Seoul, Korea

Design, wholesale and retail
of designer footwear

100%

Wholesale of designer
footwear

100%

Dormant

100%

At 25 January 2020, the Company and Group also had shares in the following subsidiary undertaking:

Subsidiary undertaking

Country of
incorporation
and operation

Address

Big Lobster Limited

The Ugly Brown Building
6a St Pancras Way
London
NW1 0TB
United Kingdom

b) Subsidiary undertakings – cost and net book value

At 25 January 2020

Increase in cost of investment for share options/awards granted to subsidiary employees

At 30 January 2021

At 26 January 2019

Increase in cost of investment for share options/awards granted to subsidiary employees

At 25 January 2020

Principal activity

Holding ordinary shares

Property

100%

Company
£’000

25,203

1,204

26,407

Company
£’000

24,978

225

25,203

132 Ted Baker plc Annual Report and Accounts 2021

Investments (Company) continued

c) Investments in equity accounted investees
The Group has a 50% interest in the ordinary share capital of No Ordinary Retail Company Pty, a company incorporated in Australia through
its wholly owned subsidiary, No Ordinary Designer Label Limited. The joint venture is represented by eight stores in Australia and one store in
New Zealand (2020: eight stores in Australia and one store in New Zealand).

The Group has a 50% interest in the ordinary share capital of Shanghai LongShang Trading Company Ltd operating in China including Hong Kong
S.A.R. and Macau S.A.R. The joint venture is represented by 18 stores in China (2020: 12) and three stores in Hong Kong (2020: three).

Opening investment in joint ventures

Investment

Share of (loss) of joint ventures

Share of non-underlying cost of joint ventures

Dividend received

Closing investment in joint ventures

53 weeks ended
30 January
2021
£’000

52 weeks ended
25 January
2020
£’000

5,088

–

(1,136)

(7)

(254)

3,691

1,874

5,710

(1,229)

(989)

(278)

5,088

The above carrying value represents the initial cost of the investment undertaken, as well as any subsequent change in net assets of the joint ventures,
as at 30 January 2021.

Amounts due from equity accounted investee

30 January
2021
£’000

4,305

25 January
2020
£’000

4,462

There are no contingent liabilities relating to the Group’s interest in the joint venture, and no contingent liabilities of the venture itself. The joint ventures’
loss for the periods ended 30 January 2021 and 25 January 2020 and its assets and liabilities are as follows:

Non-current assets

Current assets

Current liabilities

Net assets

Share capital

Retained earnings

Current period loss, net of tax

Exchange rate movement

Total equity

30 January
2021
£’000

19,886

17,819

(32,527)

5,178

39,766

(33,092)

(1,496)

–

5,178

25 January
2020
£’000

14,386

6,921

(3,619)

17,688

39,995

(19,758)

(2,601)

17,688

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14 DEFERRED TAX ASSETS AND LIABILITIES

As at 30 January

Deferred tax asset on UK operations arising from:

Assets

Share-based payments

UK tax losses

Other

Derivative financial instruments

Liabilities

Property, plant and equipment

Net deferred tax asset on UK operations

Deferred tax liability arising on acquisition of
No Ordinary Shoes Limited:

No Ordinary Shoes Limited – Deferred tax asset

Total deferred tax asset on UK operations

Deferred tax asset on foreign operations arising from:

Foreign losses

Inventory

Property, plant & equipment

IFRS 16

Other

State taxes

Net deferred tax asset/(liability) on foreign operations

Total deferred tax asset/(liability

Asset/(liability)
brought forward
£’000

(Charge)/credit
to income
statement
£’000

(Charge)/credit
to equity
£’000

Foreign exchange
on retranslation
£’000

Asset/(liability)
carried forward
£’000

126

4,114

178

(3,176)

1,299

(412)

976

1,144

3,810

1,148

4,058

636

2,278

13,074

14,050

(3)

224

3,428

3,737

412

(89)

4,060

3,869

(2,664)

660

2,671

2,581

2,539

9,656

587

–

614

–

614

–

13,716

614

–

(163)

201

(165)

–

(670)

(745)

144

4,782

402

252

5,650

–

5,650

4,850

1,347

1,643

6,729

2,547

4,869

21,985

27,635

At 30 January 2021, the net deferred tax asset of £27,635,000 (2020: £14,050,000) comprises a deferred tax asset of £27,635,000
(2020: £17,638,000) and a deferred tax liability of £nil (2020: £3,588,000).

Recognition of deferred tax assets is based on the generation of future taxable profits that will allow utilisation of the asset. Future taxable profits are
forecast by jurisdiction and the associated tax charge calculated to ensure the recoverability of the deferred tax asset.

Deferred tax assets are only recognised on the foreign assets when these businesses pass their development phase and when management considers
it probable that future taxable profits will be available against which they can be utilised.

The tax effect of the unused cumulative tax losses for which no deferred tax asset has been recognised in the balance sheet is £4,955,000
(2020: £2,788,000). £327,000 of losses will expire in 0-5 years, £295,000 of losses will expire in 6-10 years, and £4,333,000 of losses have
no expiration date.

134 Ted Baker plc Annual Report and Accounts 2021

INVENTORIES

Raw materials and packaging

Work in progress

Finished goods and goods for resale

Group
30 January
2021
£’000

1,960

657

85,231

87,848

Group
25 January
2020
£’000

3,378

1,178

127,107

131,663

Cost of inventories recognised as an expense within cost of sales during the period

156,444

323,388

The write down of inventory to fair value less cost of sales for the 53 weeks to 30 January 2021 was £11,144,409 (2020: £55,712,000).

Inventories written down and recognised as an expense in the period relates to inventory written down to the net realisable value and the net
movement in inventory provisions during the period. In previous periods management have not provided for inventory which has been reclassified into
a future season (‘re-seasoned stock’). During the period, as a result of unusual trading conditions there has been a material increase in the inventory
holding that has been re-seasoned. Consequently, management have considered it appropriate to make a provision against this category, amounting
to £1.6m at the balance sheet date. The write down and any reversal are included in cost of sales. For further details on inventory valuation, key
assumptions and sensitivities, see Note 1x).

16 TRADE AND OTHER RECEIVABLES

Trade receivables

Amounts owed by Group undertakings

Prepayments and accrued income

Other taxes and social security

Group
30 January
2021
£’000

34,366

–

10,300

–

44,666

Group
25 January
2020
£’000

47,171

–

18,887

1,213

67,271

Company
30 January
2021
£’000

–

Company
25 January
2020
£’000

–

27,096

–

27,096

Included in prepayments and accrued income are accrued income amounts of £1.1 million (2020: £1.7 million) in relation to licensing income which
has not yet been invoiced.

Expected credit losses

The Group measures the loss allowance for trade receivables at an amount equal to lifetime expected credit losses (ECL). The ECL on trade
receivables are estimated with reference to past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted
for factors that are specific to the debtor, general economic conditions of the industry in which the debtor operates and an assessment of both the
current as well as the forecast direction of conditions at the period end date. There has been no change in the estimation techniques or significant
assumptions made during the current reporting period. The Group has credit insurance and standby letters of credit in place with several customers
to mitigate exposure against customer credit risk.

The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic
prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered bankruptcy or administration proceedings. The Group
debt provision at 30 January 2021 amounted to £565,000 (2020: £97,000).

At the year end, the Group has one customer with an outstanding debtor balance equal to approximately of 19% of the total outstanding balance.
Having assessed the customer and reviewed the aging of the outstanding debt, the balance is not seen as a greater credit risk to the Group than
other debtors.

The table below shows the credit risk exposure on the Group’s trade receivables at 30 January 2021:

Gross carrying amount – trade receivables

Loss allowance

Net carrying amount

Carrying
amount
£’000

34,931

565

34,366

Current
amount
£’000

20,712

Overdue
1-30 days
£’000

2,660

2,652

Overdue
31-60 days
£’000

Overdue
61-90 days
£’000

3,538

3,478

1,075

1,059

Overdue
90+ days
£’000

6,946

481

6,465

The Group has no significant concentrations of credit risk. The amounts owed by Group undertakings balance comprises an interest free
intercompany loan with a subsidiary within the Group, which is repayable on demand. The ability of the Group undertaking to repay outstanding
balances to the Company is assessed at each reporting date and counterparty credit risk is reviewed on a regular basis using the IFRS 9 expected
credit loss impairment model. If a significant increase in the credit risk occurs, credit losses are recorded in the income statement. As at 30 January
2021, and at 25 January 2020, the expected credit loss of the Company’s trade and other receivables was negligible and hence no impairment
of the receivable was recorded.

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17 DERIVATIVE FINANCIAL INSTRUMENTS

Derivatives designed as effective as hedging instruments
and carried at fair value:

Forward foreign exchange contracts

Interest rate swap

Derivatives that are carried at fair value through
profit or loss:

Foreign currency options

Note

Assets
30 January
2021
£’000

Liabilities
30 January
2021
£’000

Assets
25 January
2020
£’000

Liabilities
25 January
2020
£’000

–

(1,191)

203

–

(1,191)

203

(944)

(68)

(83)

(1,095)

Forward foreign exchange contracts are used to hedge exposure to fluctuations in foreign exchange rates that arise in the normal course of the
Group’s business.

Following the repayment of the term loan in the period, the interest rate swap has deemed ineffective and has been recycled through the profit and
loss account. There were no other ineffective cash flow hedges in the period (2020: £nil).

Gains and losses in equity relating to derivatives in effective hedging relationships at 30 January 2021 will remain there until the forecast transaction
occurs. When the hedged item is a non-financial asset, the amount recognised in equity is transferred to the carrying amount of the asset when it is
recognised. In other cases, the amount recognised in other comprehensive income is transferred to the income statement in the same period that the
hedged item affects the income statement.

The charge to the income statement in respect of changes in the fair value of foreign currency derivatives that do not meet the criteria for hedge
accounting was £nil (2020: charge of £116,000).

18 PROVISIONS

Group

Balance at 25 January 2020

Provided in the period

Released in the period

Balance at 30 January 2021

Onerous contract
£’000

Dilapidations
£’000

–

4,408

(2,435)

1,973

–

2,942

–

2,942

Total
£’000

–

7,350

(2,435)

4,915

Onerous contract provision of £1,973k relates to the provision against the liability for materials relating to cancelled orders due to the Covid-19
pandemic. This is management’s best estimate of the unavoidable costs in meeting the obligation under these contracts. This liability is expected to
be settled within 12 months and has therefore been shown as a current liability.

Dilapidations provisions are the estimated costs of restoring stores to the required condition per the lease on exit of the store.

136 Ted Baker plc Annual Report and Accounts 2021

19 NET CASH/BORROWINGS

Cash and cash equivalents per balance sheet

Borrowings

Net cash/borrowings

The Group’s borrowings have been summarised below:

Current:

Revolving credit facility

Total current borrowings

Reconciliation of liabilities to cash flow arising from financing activities:

Group
30 January
2021
£’000

66,671

–

66,671

Group
25 January
2020
£’000

52,912

(180,000)

(127,088)

Company
30 January
2021
£’000

5,195

–

5,195

Company
25 January
2020
£’000

–

Interest rate

Repayable date

2.1% +LIBOR

Sept 2022

Group
30 January
2021
£’000

Group
25 January
2020
£’000

–

180,000

Balance at 25 January 2020

Changes from financing cash flows:

Repayment of borrowings

Balance at 30 January 2021

20 TRADE AND OTHER PAYABLES

Trade payables

Accruals and deferred income

Other creditors

Other tax

1 More details of the restatement are shown in note 1y).

Group
30 January
2021
£’000

180,000

(180,000)

–

Group
30 January
2021
£’000

60,574

20,035

8,665

8,864

98,138

Group
25 January
2020
Restated1
£’000

53,092

22,934

9,510

10,666

96,202

Company
30 January
2021
£’000

Company
25 January
2020
£’000

–

112

–

112

–

113

–

113

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IFRS 16

Right-of-use assets
The Group has applied IFRS 16 using the simplified modified retrospective transition approach.

Right-of-use assets are recognised in relation to the Group’s leases, representing the economic benefits of the Group’s right to use the underlying
leased assets. The Group’s lease portfolio is principally comprised of property leases of stores, distribution centres and overseas head offices.

The Group has applied the practical expedient for the application of rent concessions provided as a response to the Covid-19 pandemic, as allowed
by the amendment to IFRS 16.

Right-of-use assets

Cost

Opening

Adoption of IFRS 16

Restatement1

Restated opening

Gross adjustment2

Additions

(Decrease)/increase in right-of-use assets

Disposals

Closing

Amortisation

Opening

Gross adjustment2

Charge for the period

Restatement1

Disposals

Impairments3

Closing

Net book value

30 January
2021
£’000

25 January
2020
£’000

188,219

–

188,219

(2,019)

9,229

(9,179)

(4,706)

–

185,409

(13,276)

172,133

–

12,473

9,445

(5,832)

181,544

188,219

(50,232)

2,019

(26,763)

–

4,706

(29,515)

(99,785)

81,759

–

(38,048)

2,229

2,426

(16,839)

(50,232)

137,987

1 More details of the restatement are shown in note 1y).

2 Gross adjustment between cost and amortisation brought forward to better reflect underlying gross split.

3 Impairments in the year of £29,515,000 consisted of the interim impairment of £33,922,000 less a reversal of £4,407,000 arising from modifications.

Lease liabilities

When measuring lease liabilities, the Group discounted lease payments using its incremental borrowing rate upon transition to IFRS 16 and
at subsequent remeasurement dates. The discount rates applied range between 3.9% to 9.1%, they have been determined based on comparable
bond yields and are lease specific varying by territory and lease length.

Amounts recognised in profit or loss

Interest on lease liabilities1

1 Expenses related to variable rental payments for leasehold properties are included within Note 3.

Lease liabilities included in the statement of financial position

Current

Non-current

Total lease liabilities

138 Ted Baker plc Annual Report and Accounts 2021

Group
30 January
2021
£’000

6,781

Group
25 January
2020
£’000

8,309

Group
30 January
2021
£’000

33,754

106,617

140,371

Group
25 January
2020
£’000

36,381

131,956

168,337

IFRS 16 continued

Reconciliation of liabilities to cash flow arising from financing activities

Opening

Gross adjustment1
Changes from financing cash flows:

Payment of lease liabilities

Remeasurement

Total changes from financing cash flows

Increase in lease liability2
Disposal of lease liabilities

The effect of changes in foreign exchange rates

Interest expense

Total other changes

1 Gross adjustment to opening balance to better reflect the gross split.
2 Increase in lease liability consists of additions of £9.229m and reductions of £6.720m arising from lease modifications.

Maturity analysis – contractual undiscounted cash flows

Less than one year

One to five years

More than five years

22 CAPITAL AND RESERVES

Number of ordinary shares

Ordinary shares of 5p each

Opening allotted, called up and fully paid up

Exercise of share options

Ordinary shares issued for cash

Closing allotted, called up and fully paid

Share capital

Share capital at the start of the period

Share Options

Share capital issued during the period

Share capital at the end of the period

Group
30 January
2021
£’000

168,337

(807)

(35,826)

(361)

(36,187)

2,509

–

(262)

6,781

9,028

Group
25 January
2020
£’000

185,409

–

(41,337)

–

(41,337)

21,918

(3,406)

(2,556)

8,309

24,265

140,371

168,337

Group
30 January
2021
£’000

34,510

98,531

17,355

150,396

Group
25 January
2020
£’000

36,379

107,024

40,786

184,189

30 January
2021

25 January
2020

44,566,689

44,563,346

42,097

140,000,000

3,343

–

184,608,786

44,566,689

30 January
2021
£’000

2,228

7,000

9,230

25 January
2020
£’000

2,228

–

2,228

On 19 June 2020, the Company issued 140,000,000 ordinary 5p shares at a price of 75p each. The 70p premium per share, less the total issue
costs of £7.6 million, was credited to the share premium account.

Other reserves and retained earnings
Other reserves and retained earnings include the following reserve accounts:

Cash flow hedging reserve
The effective portion of financial instruments that are designated as hedging instruments and are documented as part of an effective hedge of future cash
flows are recognised directly in equity and recycled to the income statement when the underlying cash flows occur, or are no longer expected to occur.

Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations.

Other reserves – Company
This reserve relates to the premium on equity consideration used in the acquisition of a subsidiary, No Ordinary Designer Label Limited, by Ted Baker plc
in 1997, which is classified within other reserves under the Companies Act. This reserve also includes the cost of share options and awards granted to
employees of the Group. This reduction in other reserves is reflected in retained earnings in the Group Statement of Changes in Equity.

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23 SHARE-BASED PAYMENTS

The pre-tax charge in the income statement for share schemes in the 53 week period to 30 January 2021 was £1,204,000 (2020: £225,000).

Long-Term Incentive Plan

Share awards are made in the form of nil-cost options over Ordinary shares in Ted Baker plc under the Long-Term Incentive Plan 2013 (LTIP 2013),
the Ted Baker Long Term Incentive Plan (LTIP 2020), and the Ted Baker Incentive Plan (TBIP 2020) which were approved by the shareholders at the
general meetings held on 20 June 2013, 21 July 2020 and 21 July 2020 respectively. The options are exercisable three years after the date of grant
subject to the satisfaction of the vesting conditions.

Share options and awards granted under the LTIP 2013 and LTIP 2020 and outstanding at the end of the period were as follows:

Grant date

Expiry date

1 May 2014

30 April 2015

5 May 2016

6 April 2017

3 April 2018

16 April 2019

4 September 2020

26 October 2020

16 December 2020

20 April 2024

29 April 2025

4 May 2026

5 April 2027

2 April 2028

15 April 2022

4 September 2030

Number of
options granted

254,141

192,860

234,159

221,234

251,786

403,600

Fair value at
grant date

695.0p

1,785.0p

875.0p

1,355.0p

1,071.0p

592.0p

Number of
awards
outstanding
at 30 January
2021

–

4,905

–

137,755

4,246,336

84.5p/91.6p

4,166,660

518,511

696,615

7,019,242

84.5p/90.1p

84.5p/97.1p

518,511

696,615

Number of
awards
outstanding
at 25 January
2020

670

47,721

–

85,427

133,708

279,983

–

5,524,446

547,509

The terms and conditions of the awards granted during the 53 weeks ended 30 January 2021 are as follows:

Grant date

Type of award

Number of options

Vesting conditions

4 September, 26 October,
16 December 2020

LTIP 2020 & TBIP 2020

3,733,394

50% performance against comparator group
to September 2023, 50% free cash flow
against targets for year ended January 2023

Vesting period

Up to 100% after
three years

4 September, 26 October,
16 December 2020

TBIP 2020

1,728,068

No performance based vesting conditions,
options lapse if recipient under notice or
no longer employed as at vesting date

100% after
three years

The credit to the income statement for the period in respect of options issued under the LTIP 2013 amounted to £nil (2020: £nil).

The Monte-Carlo valuation methodology has been used as the basis of measuring the fair value of awards made under the LTIP 2013 and LTIP 2020.
The range of inputs into the Monte-Carlo model for awards made was as follows:

Share price at grant

Share price at grant (based on six-month average) for share price performance condition

Risk free interest rate

Expected life of options

Share price volatility – Company

Share price volatility – Median comparator of LTIP 2020 awards

Dividend yield

£1.134–£2.855

1,752.0p–2,809.0p

-11.0%–0.87%

3 years

29.0%–38.71%

52.0%

1.41%–6.88%

The share price volatility was determined by calculating the historic volatility of the Group’s share price over a time period matching the expected life
of the option.

140 Ted Baker plc Annual Report and Accounts 2021

24 FINANCIAL COMMITMENTS

Group

a) Capital commitments
The Group has capital commitments of £6,774,901 related to commitments at 30 January 2021 (2020: £3,333,934) which were not provided in the
financial statements.

b) Concessions
The total committed payments to concessions are £2,807,000 as at 30 January 2021 (2020: £3,232,000), relating to payments due within one year.
These amounts only include committed minimum payments and exclude the variable or contingent elements of future rental payments. As a result, the
amounts charged to the income statement may be materially higher than the financial commitment at the prior period end.

Contracts for concessions often contain rental expenses based on revenue. Under the terms of the contracts there are two bases:

ɫ Minimum payments levels due, together with variable amounts in excess of those minimums, based on the concession’s future revenue levels.

ɫ No minimum payment conditions within the terms of the contract such that rental charges are contingent wholly on future store revenue levels.

c) Pension arrangements
The Group operates a number of defined contribution schemes for senior management and a stakeholder pension scheme for employees, for which
the pension cost charge for the period amounted to £1,395,000 (2020: £2,230,000). Contributions totalling £204,000 are included in accruals and
deferred income at the period end (2020: £332,000).

Company

d) Letter of support
The Company has signed letters of support to various of its subsidiary companies. The most significant is with No Ordinary Design Limited, which has
an intercompany payable of £119.7 million at 30 January 2021.

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25 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

a) Carrying amount and fair values of financial assets and liabilities

Financial assets and liabilities – Group
The fair values of financial assets and liabilities of the Group, together with the carrying amounts shown in the balance sheet, are as follows:

Financial assets

Trade receivables

Accrued income

Amount due from equity accounted investee

Derivative financial assets

Cash and cash equivalents

Total financial assets

Financial liabilities

Trade and other payables

Derivative financial liabilities

Borrowings

Total financial liabilities

Net financial assets/(liabilities)

1 More details of the restatement are shown in note 1y).

Carrying amount
30 January
2021
£’000

29,437

1,154

4,305

–

66,176

101,072

(60,574)

(1,191)

–

(61,765)

39,307

Fair value
30 January
2021
£’000

29,437

1,154

4,305

–

66,176

101,072

(60,574)

(1,191)

–

(61,765)

39,307

Carrying amount
25 January
2020
(Restated)1
£’000

Fair value
25 January
2020
(Restated)1
£’000

47,171

1,708

4,462

203

52,912

47,171

1,708

4,462

203

52,912

106,456

(96,202)

(1,095)

(180,000)

(277,297)

(170,841)

(96,202)

(1,095)

(180,000)

(277,297)

(170,841)

There are no significant trade debtor balances overdue and no significant amounts impaired at the end of the period. The carrying and fair values of
lease liabilities have been disclosed in Note 20.

Financial assets and liabilities – Company
The fair values of financial assets and liabilities of the Company, together with the carrying amounts shown in the balance sheet, are as follows:

Financial assets

Amounts owed by Group undertakings

Cash and cash equivalents

Total financial assets

Financial liabilities

Trade and other payables

Total financial liabilities

Net financial assets

Carrying amount
30 January
2021
£’000

Fair value
30 January
2021
£’000

Carrying amount
25 January
2020
£’000

119,672

5,195

124,867

119,672

5,195

124,867

(112)

27,096

27,117

(113)

Fair value
25 January
2020
£’000

27,096

27,117

(113)

124,755

27,004

All non-derivative financial assets and liabilities, for the Group and Company, are measured at amortised cost. Their carrying amounts are a reasonable
approximation of their fair value due to their short maturities or because interest rates are floating rates where payments are reset to market rates
at intervals of less than one year.

Derivative assets and liabilities are held at fair value (see Note 17), which is determined by reference to third-party valuations (usually from a bank)
or by reference to readily observable market prices. Derivative assets and liabilities that are not used in hedging relationships are held at fair value
through the profit and loss.

The valuation of all financial assets and liabilities carried at fair value by the Group is based on hierarchy Level 2. Fair value hierarchy levels are
defined as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly

(i.e. derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

142 Ted Baker plc Annual Report and Accounts 2021

25 Financial Instruments and Risk Management continued

b) Derivative financial instruments

Forward foreign exchange contracts

Interest rate swap

Contractual/
notional amounts
30 January
2021
£’000

21,583

–

21,583

Assets
30 January
2021
£’000

–

Liabilities
30 January
2021
£’000

(1,191)

–

(1,191)

Contractual/
notional amounts
25 January
2020
£’000

67,959

30,000

97,959

Assets
25 January
2020
£’000

203

–

203

Liabilities
25 January
2020
£’000

(1,027)

(68)

(1,095)

The following table indicates the timing of the notional amount of the foreign exchange derivative hedging instruments.

Within six months

Between six months and one year

Between one and two years

Contractual/
notional amounts
30 January
2021
£’000

Contractual/
notional amounts
25 January
2020
£’000

10,021

9,250

2,312

21,583

19,262

32,465

16,232

67,959

The £30,000,000 notional amount of the interest rate swap expired in December 2020.

c) Cash flow hedging reserve movements

The following table indicates the cash flow hedging reserve balance at 30 January 2021 and the periods in which the cash flows are expected to
occur. The periods in which the cash flows are expected to impact the income statement are materially the same.

Within six months

Between six months and one year

Between one and two years

Unrecognised gain/(loss)

Currency derivatives
30 January
2021
£’000

Currency derivatives
25 January
2020
£’000

490

470

112

1,072

150

(543)

(323)

(716)

d) Financial risk identification and management

The Group’s multinational operations and debt financing requirements expose it to a variety of financial risks. In the course of its business the Group
is exposed to:

ɫ Market risk;

ɫ Credit risk; and

ɫ Liquidity risks have been established and are reviewed regularly to reflect changes in the market conditions and the Group’s activities.

i) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the Group’s income or the value of its
holdings of financial instruments. At the balance sheet date, the only significant market risk to the Group arises from foreign currency risk.

Foreign currency risk
The Group operates internationally and is therefore exposed to foreign currency risk primarily on purchases of inventory denominated in US Dollars
and Euros.

The Board reviews and agrees policies for managing exchange rate risks on a regular basis. Where appropriate, the Group uses financial instruments
to mitigate these risks. All transactions in derivatives, principally forward exchange contracts, are taken solely to manage these risks. No transactions of
a speculative nature are entered into.

The Group’s policy is to hedge substantially all the risks of such currency fluctuations by using forward contracts considering forecast foreign currency
cash inflows and outflows. The policy allows for these risks to be hedged for up to 24 months ahead in order to fix the cost in Sterling.

In April 2020, the Group exited its foreign exchange contracts to crystallise a cash gain and, as a result, the Group’s foreign exchange risk is
unhedged for the next financial year.

The vast majority of projected purchases in each major currency qualify as “highly probable” forecast transactions for hedge accounting purposes.

The Group also publishes its financial statements in Sterling and is therefore exposed to foreign currency translation risks due to movements in foreign
exchange rates on the translation of the results and underlying net assets of its foreign operations into Sterling. Translation risks are not hedged.

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Foreign currency sensitivity analysis
The Group has used sensitivity analysis that measures the estimated change to the income statement and equity of a 10% strengthening or weakening
in Sterling against all other currencies, using the rates applicable at 30 January 2021. The analysis assumes that all other variables, in particular,
interest rates, remain constant.

The following sensitivity analysis illustrates the impact that a 10% strengthening of the Group’s reporting currency against local functional currencies
would have had on profit before tax and equity. The analysis covers currency translation exposures at the period end on the Group’s financial assets
and liabilities that are not denominated in the functional currencies of those businesses.

A 10% (2020: 10%) strengthening or weakening of Sterling against the following currencies at 30 January 2021 would have increased/(decreased)
equity and profit before tax by the amounts shown in the following table:

Test of 10% (2020: 10%) strengthening in Sterling against other currencies

US Dollar

Euro

Test of 10% (2020: 10%) weakening in Sterling against other currencies

US Dollar

Euro

Impact on profit
30 January
2021
£’000

Impact on equity
30 January
2021
£’000

Impact on profit
25 January
2020
£’000

Impact on equity
25 January
2020
£’000

(201)

744

543

246

(910)

(664)

(201)

744

543

246

(910)

(664)

1,436

(279)

1,157

(1,755)

341

(1,414)

1,436

(279)

1,157

(1,755)

341

(1,414)

Interest rate risk
The Group’s exposure to interest rate risk is limited to floating rate financial assets and liabilities.

The Group’s policy is to minimise the impact of adverse interest rate movements, through the use of interest rate management tools, taking into account
factors such as the timing of future cash flows and forward yield curves. The use of any interest rate management tools is aligned with timescales of
current and forecast net debt for which underlying projections can be accurately made. The Group’s interest rate derivatives comprise interest rate
swap agreements, fixing a portion of the floating rate net debt to fixed rates.

The interest rate profile of the financial assets and liabilities of the Group is as follows:

Financial assets and liabilities subject to interest rate risk

Sterling

US Dollar

Euro

Other

Group
30 January
2021
£’000

13,736

8,901

8,823

4,296

35,756

Group
25 January
£’000

Company
30 January
2021
£’000

(185,709)

5,195

14,325

8,364

5,766

–

(157,254)

5,195

Company
30 January
£’000

–

The above table does not include the notional value of net debt for which interest rate swaps are in place.

Interest rate sensitivity analysis
The following sensitivity analysis illustrates the impact that a change of 50 basis points in LIBOR interest rates at the balance sheet date would have
increased/(decreased) equity and profit before tax by the amounts shown below. This calculation assumes that the change occurred at the balance
sheet date and had been applied to risk exposures existing at that date.

Interest rate increase of 0.5%

Interest rate decrease of 0.5%

Impact on profit
30 January
2021
£’000

Impact on equity
30 January
2021
£’000

Impact on profit
25 January
2020
£’000

Impact on equity
25 January
2020
£’000

179

(179)

179

(179)

(786)

786

(786)

786

ii) Credit risk
Credit risk is the risk that counterparties to financial instruments do not perform according to the terms of the contract or instrument. The Group’s
principal financial assets are cash, trade and other receivables, and derivative financial assets. The Group’s credit risk is primarily attributable to
its trade and other receivables.

Trade and other receivables
Credit risk arises on credit exposure to wholesale, licence and concession partners including outstanding receivables and committed transactions.
The Group substantially mitigates credit risk through credit insurance, standby letters of credit or supplier finance arrangements when possible.

Wholesale partner receivables risk is mitigated by credit insurance being taken out up to the amount of the credit limit. All new wholesale customers
are checked against appropriate trade references and details such as frequency/delinquency. The limits applied to each customer are set in
conjunction with our credit insurer’s advice. Monitoring of credit limits is undertaken daily.

144 Ted Baker plc Annual Report and Accounts 2021

25 Financial Instruments and Risk Management continued

All territorial licence partners require a standby letter of credit up to the amount of their credit limit, which is determined based on creditworthiness
and volume of business. The Group is not able to protect its licence partner income with credit insurance, although it does not consider this
a significant credit risk. Forecasts are obtained from all its licence partners throughout the period to allow extensive visibility of future income.

The Company has credit risk associated with its intercompany receivable. This balance is held at cost less provision for impairment. The provision
for impairment is considered on a specific basis in relation to the balance as there is no history of credit losses.

iii) Liquidity risk
Refer to note 1, Basis of Preparation – Going Concern.
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit
facilities. Due to the dynamic nature of the underlying businesses, Group treasury maintains flexibility in funding by maintaining availability under
committed credit lines.

Management monitors rolling forecasts of the Group’s liquidity reserve, (which comprises of the undrawn borrowing facility and cash and cash
equivalents) based on expected cash flow. This is generally carried out at entity level in the operating companies of the Group in accordance
with practice and limits set by the Group. In addition, the Group’s liquidity management policy involves projecting cash flows in major currencies
and considering the level of liquid assets necessary to meet these, and monitoring balance sheet liquidity ratios against internal and external
regulatory requirements.

The table below analyses the Group’s financial liabilities and derivative financial liabilities into relevant maturity groupings based on the remaining
period to the contractual maturity date, at the balance sheet date. The amounts disclosed in the table are the contractual undiscounted cash flows.
Balances due within twelve months equal their carrying balances as the impact of discounting is not significant.

At 30 January 2021

Non-derivative financial liabilities

Trade and other payables

Borrowings

Lease liabilities

Derivative financial liabilities

Derivative financial instruments

At 25 January 2020

Non-derivative financial liabilities

Trade and other payables

Borrowings

Lease liabilities

Derivative financial liabilities

Derivative financial instruments

Carrying amount
£’000

Contracted amount
less than 1 year
£’000

Contracted amount
1–5 years
£’000

Contracted amount
more than 5 years
£’000

113,604

–

150,396

–

34,510

–

98,531

17,355

1,191

88,625

180,000

184,189

88,625

180,000

36,379

–

107,024

40,786

1,095

–

The Group manages its liquidity risk through the use of secured revolving credit facilities. At 30 January 2021, the Group’s financing arrangements
comprised of two facilities, a £107.8 million Revolving Credit Facility maturing in September 2022, and a £25 million restricted Revolving Credit
Facility maturing in January 2022. At year end, neither facility had been drawn down. On 24 May 2021, the Group successfully refinanced existing
debt facilities, reducing the size of the facility to reflect future forecasts for the business. The existing facilities totalling £132.8 million have been
replaced with a £90 million Revolving Credit Facility, reducing to £80 million in January 2022, before maturing in November 2023. This facility
provides the resources to fund the planned working capital requirements and capital expenditure to support the Group’s long-term growth strategy.
Interest is payable based on LIBOR (or its replacement after 31 December 2021) plus a margin.

The facilities contain financial covenants which are believed to be appropriate in the current economic climate and tested on a quarterly basis.
The Group monitors actual and prospective compliance with these on a regular basis.

The financial covenant tests are based upon the following:

ɫ Minimum EBITDA levels (applies up to April 2022)

ɫ A ratio of total net debt to EBITDA (applies after August 2022)

ɫ A fixed charge cover ratio (applies after August 2022).

e) Capital management

The Board’s immediate actions to capital management are set out in note 1, Basis of Preparation – Going Concern.

The Board’s policy is to maintain a robust capital base, defined as total shareholders’ equity, totalling £165,997,000 at 30 January 2021
(2020: £140,673,000), to maintain investor, creditor and market confidence and to sustain future development of the business. From time to time
the Company purchases its own shares on the market; the timing of these purchases depends on market prices. Primarily the shares are intended to
be used for issuing shares under the Group and Company’s share option and award programmes. Buy and sell decisions are made on a specific
transaction basis by the Board; the Group and Company do not have a defined share buy-back plan.

It is the Board’s intention to achieve a dividend cover ratio of two times every year. There were no changes in the Group and Company’s approach
to capital management during the period.

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26 RELATED PARTIES

The Group considers its Executive and Non-Executive Directors, together with the Executive Team, as key management and their compensation
therefore comprises a related-party transaction.

Total compensation in respect of key management for the period was as follows:

Salaries, fees and short-term benefits

Contributions to money purchase pension schemes

Share-based payment (credit)/charges

53 weeks ended
30 January
2021
£’000

52 weeks ended
25 January
2020
£’000

3,297

–

3,354

1,092

–

1,147

Directors of the Company as at 30 January 2021 and their immediate relatives control 0.2% of the voting shares of the Company.

At 30 January 2021, No Ordinary Designer Label Limited (NODL), the main trading company, owed Ted Baker plc £122,677,000
(2020: £27,096,000) and owed No Ordinary Shoes Limited £10,070,000 (2020: £10,070,000.) NODL was owed £105,290,000
(2020: £174,488,000) from the other subsidiaries within the Group. Transactions between subsidiaries were priced on an arm’s length basis.

The Group has a 50% interest in the ordinary share capital of No Ordinary Retail Company Pty*, a company incorporated in Australia, through
its wholly owned subsidiary No Ordinary Designer Label Limited. As at 30 January 2021, the joint venture owed £372,000 to the main trading
company (2020: £530,000). In the period the value of sales made to the joint venture by the Group was £1,261,000 (2020: £2,485,000).

The Group has a 50% interest in the ordinary share capital of Shanghai LongShang Trading Company Ltd*, a company incorporated in Mainland
China, Hong Kong and Macau, through its wholly owned subsidiary No Ordinary Designer Label Limited. As at 30 January 2021, the joint venture
owed £3,933,000 to the main trading company (2020: £3,933,000). In the period the value of sales made to the joint venture by the Group was
£2,876,000 (2020: £1,074,000).

Ray Kelvin, the former Chief Executive and a major shareholder in the business, has the right to appoint a non-executive director. He has exercised
this right, and Colin La Fontaine Jackson was appointed to the Board in September 2020.

*The registered office addresses are as follows:

Related party

Registered office address

No Ordinary Retail Company Pty

6 Albert St, Preston VIC 3072, Australia

Ted Baker (Hong Kong) Limited

Room 2001-2, Tower 2,
The Gateway, Harbour City,
25 Canton Road,
Tsim Sha Tsui, Kowloon,
Hong Kong

27 POST BALANCE SHEET EVENTS

On 24 May 2021, the Group successfully refinanced its existing debt facilities of £132.8 million due to mature in September 2022 with one maturing
in November 2023. The new Revolving Credit Facility, reflecting the future business forecasts, is initially for £90 million, reducing to £80 million in
January 2022. Unamortised fees from the original facility will be treated as an underlying item in the financial statements for 2022. Fees associated
with the facility will be amortised over the expected life of the facility as an underlying item.

In May 2021, the Group restructured its French business, following a consultation with all colleagues in country, closing three of its four owned stores
or outlets. The future operating model will be based around concession and partner sites. The costs of approximately £2.2 million for redundancy,
asset write-offs and other fees, have been treated as non-underlying costs in 2022.

146 Ted Baker plc Annual Report and Accounts 2021

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FIVE YEAR SUMMARY (UNAUDITED)

Results

Revenue2

Operating profit/(loss)

Profit/(loss) before tax

Profit/(loss) before tax and non-underlying items

Profit/(loss) for the period

Assets employed

Property, plant and equipment

Other non-current assets

Net current assets/(liabilities)

Non-current liabilities

Net assets

Financed by

Shareholders’ funds

Key statistics

Basic earnings per share

Underlying earnings per share

Diluted earnings per share

Dividends per share

Dividend cover3

Dividend cover before non-underlying costs3

Pre-tax return on capital employed before
non-underlying items

Post-tax return on capital employed before
non-underlying items

52 weeks ended
28 January
2017
£’000

52 weeks ended
27 January
2018
£’000

52 weeks ended
26 January
2019
£’000

52 weeks ended
25 January
2020
(Restated)1
£’000

53 weeks ended
30 January
2021
£’000

549,223

62,497

61,271

65,784

46,568

144,354

31,189

91,852

(56,851)

613,113

70,727

68,789

73,465

52,744

139,075

40,733

92,515

(48,273)

639,554

630,478

34,301

30,656

62,965

24,478

131,865

54,708

89,813

(47,918)

(59,954)

(77,625)

4,778

(68,186)

127,429

203,612

(54,824)

(135,544)

351,983

(98,895)

(107,729)

(59,161)

(86,445)

39,401

148,384

75,783

(111,532)

210,544

224,050

228,468

140,673

152,036

210,544

224,050

228,468

140,673

152,036

105.7p

114.0p

104.5p

53.6p

2.0 times

2.1 times

27.3%

20.8%

119.0p

127.7p

118.3p

60.1p

2.0 times

2.1 times

26.8%

20.6%

55.0p

114.2p

55.0p

58.6p

.9 times

1.9 times

19.1%

15.3%

(153.0p)

6.7p

(153.0p)

7.8p

-20.3 times

1.2 times

7.3%

6.5%

(56.2p)

(26.0p)

(56.2p)

–

1 The prior period errors or misstatements relating to stock are detailed further in Note 1(y).

2 Revenue has been restated for all years to include licence income.

3 The dividend has been temporarily suspended since the interim dividend for the 52 week period to 25 January 2020.

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ALTERNATIVE PERFORMANCE MEASURES (UNAUDITED)

As stated in Note 1 ab), the Group uses certain measures that are not separately disclosable under IFRS or the Companies Act. The Directors believe
that these additional measures, which are used internally, are useful to the users of the financial statements in helping them understand the underlying
business performance. Reconciliations of the reported numbers to alternative performance measures are shown below.

Throughout the Annual Report and Accounts, alternative performance measures (APMs) have been reported which are non-GAAP measures and are
presented to provide stakeholders with additional financial information on the performance of the Group.

These APMs should not be viewed in isolation or as an alternative to the equivalent GAAP measure. The measures detailed below are not defined
by IFRS and therefore may not be directly comparable with other companies’ APMs – this includes those in the retail industry.

UK & Europe

Total revenue

Total retail revenue

Store revenue

eCommerce revenue

Sales per square foot including eCommerce sales

Sales per square foot excluding eCommerce sales

Wholesale revenue

Licence income

North America

Total revenue

Total retail revenue

Store revenue

eCommerce revenue

Sales per square foot including eCommerce sales

Sales per square foot excluding eCommerce sales

53 weeks ended
30 January
2021
Reported
£’000

53 weeks ended
30 January
2021
Foreign Exchange
Impact
£’000

53 weeks ended
30 January
2021
Constant Currency
£’000

52 weeks ended
25 January
2020
Reported
£’000

246,802

181,923

67,337

114,583

658

244

52,406

12,449

657

620

482

137

–

246,145

181,303

66,855

114,446

656

242

52,393

12,449

422,552

296,879

202,303

94,577

1,043

711

106,672

19,001

53 weeks ended
30 January
2021
Reported
£’000

53 weeks ended
30 January
2021
Foreign Exchange
Impact
£’000

53 weeks ended
30 January
2021
Constant Currency
£’000

52 weeks ended
25 January
2020
Reported
£’000

102,787

69,942

39,671

30,271

507

288

(881)

(615)

(379)

(235)

(5)

(2)

103,668

70,557

40,050

30,506

512

290

194,599

129,755

107,690

22,066

939

780

Wholesale revenue

32,846

(265)

33,111

64,844

Constant
Currency
Variance
£’000

(41.7)%

(38.9)%

(67.0)%

21%

(37.1)%

(66.0)%

(50.9)%

(34.5)%

Constant
Currency
Variance
£’000

(46.7)%

(45.6)%

(62.8)%

38.3%

(45.5)%

(62.7)%

(48.9)%

148 Ted Baker plc Annual Report and Accounts 2021

Alternative performance measures (unaudited) continued

Rest of the World

Total retail revenue

Store revenue

eCommerce revenue

Sales per square foot including eCommerce sales

Sales per square foot excluding eCommerce sales

53 weeks ended
30 January
2021
Reported
£’000

53 weeks ended
30 January
2021
Foreign Exchange
Impact
£’000

53 weeks ended
30 January
2021
Constant Currency
£’000

52 weeks ended
25 January
2020
Reported
£’000

2,394

–

337

(291)

–

(41)

2,685

–

378

13,307

11,221

2,086

662

558

Group

Total revenue

Total retail revenue

Store revenue

eCommerce revenue

Sales per square foot including eCommerce sales

Sales per square foot excluding eCommerce sales

Wholesale revenue1

Licence income

Retail operating costs

Distribution costs excluding non-underlying costs

Administration expenses excluding non-
underlying costs

53 weeks ended
30 January
2021
Reported
£’000

53 weeks ended
30 January
2021
Foreign Exchange
Impact
£’000

53 weeks ended
30 January
2021
Constant Currency
£’000

52 weeks ended
25 January
2020
Reported
£’000

351,983

254,258

109,402

144,854

603

260

85,197

12,449

164,653

175,854

71,025

(515)

(287)

(188)

(98)

(1)

–

(253)

–

(151)

(194)

(106)

352,498

254,545

109,590

144,952

604

260

85,450

12,449

168,804

176,048

630,478

439,941

321,213

118,728

994

725

171,536

19,001

232,175

247,412

71,131

88,345

Constant
Currency
Variance
£’000

(79.8)%

(76.1)%

(100)%

(42.9)%

(32.3)%

Constant
Currency
Variance
£’000

(44.1%)

(42.1)%

(65.9)%

22.1%

(39.2)%

(64.2)%

(55.1%)

(34.5)%

29.0%

27.9%

19.5%

1 On a comparable basis, excluding footwear revenue of £8.89 million (£8.92 million in constant currency), group wholesale sales decreased by 49% in constant currency to

£76.53 million (2020: £148.40m).

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n Registered Office
o

The Ugly Brown Building, 6a St. Pancras Way, London NW1 0TB

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Company Secretary
Peter Hearsey-Zoubie

Financial Advisers and Sponsor
Liberum Capital Limited, 25 Ropemaker St, London EC2Y 9LY

Auditors
BDO LLP, 55 Baker St, London W1U 7EU

Bankers
Barclays Bank Plc, 1 Churchill Place, London E14 5HP

The Royal Bank of Scotland Plc, 62-63 Threadneedle Street, London EC2R 8LA

HSBC Bank Plc, 8 Canada Square, Canary Wharf, London E14 5HQ

BBVA, S.A., One Canada Square, 44th Floor, Canary Wharf, London, E14 5AA

Registrars
Link Asset Services, 34 Beckenham Road, Beckenham, Kent BR3 4TU

Ted Baker plc
Registered in England No: 03393836

150 Ted Baker plc Annual Report and Accounts 2021

Ted Baker’s commitment to environmental issues
is reflected in this Annual Report, which has been
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This document was printed by Pureprint Group using
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