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