This FTSE fashion retailer’s shares are cheap. Here’s what I’d do next

first_img I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Image source: Getty Images Jabran Khan | Thursday, 26th March, 2020 | More on: TED This FTSE fashion retailer’s shares are cheap. Here’s what I’d do next Our 6 ‘Best Buys Now’ Shares See all posts by Jabran Khan Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Some clothing is seen as a necessity or essential, whereas some is seen as a luxury commodity. The fashion industry and landscape is ever changing. The last few years have seen a move away from more traditional high street fashion towards online shopping. Shoppers’ habits are changing and access to cheap, fast fashion is booming at the moment. The emergence of such brands as Boohoo, and the continued rise of Asos, amongst others has seen more traditional retailers employ online strategies to keep up with the times. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Ted Baker (LSE:TED) has fallen foul of the recent market crash. However its problems lie deeper than that. This current downturn may cause deeper ramifications for the British luxury retailer in the longer term.With approximately 400 stores across the world, including Europe, Asia, North America, South Africa, and Australia, I feel that tough times are ahead.Recent strugglesGoing back six months or so ago, in early October, Ted Baker shares plummeted almost 40% after large losses were revealed. This was partially due to investment to overhaul struggling Asian businesses. Losses for the six months to 11 August came in at £23m. To put this in perspective, it reported a pre-tax profit of £24.5m a year earlier. A major disaster for this revered brand. December saw a fourth profit warning in a year. It warned of a 90% profit crash. This was further compounded by the departures of its chairman and CEO. It seems the once well-led retailer is now rudderless. The market crash has seen Ted Baker’s share price drop by an alarming 50% in the past month alone. The sale of its headquarters in London for £78.75m was announced a few days ago. It will put net proceeds of £72m towards debt but did agree a short-term lease of the property. There has been a temporary closure of 384 stores, representing around 70% of its global retail sales. A direct reaction of this has been a £13.5m extension of its £180m revolving credit facility. That is never a good sign but needs must at this moment. Numbers and next stepsTed Baker will welcome the news of the government’s business rates holiday. It paid £6.2m in the last year, so the move will ease some pressure on the balance sheet. However, I do not feel it will be enough.The current price-to-earnings ratio sits close to a worrying high of 60. Dividend per share has increased year on year for the past four years but December’s profit warning saw a cessation of dividend payments.To highlight the retailer’s problems, which include other scandals and issues, the share price has seen a decrease of almost 95% across the past five years. At this point I would steer clear of Ted Baker shares and be wary of such a cheap price. I often analyse companies, especially in a market slump, and look for opportunities. This is not one of those times. Although I am a fan of the brand itself and profess to owning some of its menswear products, it is not a name I am interested in from an investment perspective. center_img I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Jabran Khan has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. “This Stock Could Be Like Buying Amazon in 1997” Simply click below to discover how you can take advantage of this. Enter Your Email Addresslast_img

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