Recent Developments in International Trade Environment and Impact on Ted Baker

INTERNATIONAL
FINANCE

Contents
INTRODUCTION...........................................................................................................................1
a) Two recent developments in the international trade environment and its impact upon
company.................................................................................................................................1
b) Key elements of the MNE’s international finance and risk strategy.................................3
c) Evaluation of financial ratios.............................................................................................4
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
International finance mainly reflects the financial transition across the nation. When
business transactions take places at international level among two or more countries than it is
recognised under the category of international finance (Gambacorta, Illes and Lombardi, 2015).
The report critically talks about two recent developments in the international environment that
impacted Ted Baker’s organisational performance. The risk management strategy that affect the
financial performance of organisation also defined in the given context. the source of finance and
the dividend policy are the key focused areas considered subject to analyse the key trend. The
evaluation of financial ratios of past two years is done in order to determine the financial
performance of organisation.
a) Two recent developments in the international trade environment and its impact upon company
Developments and growth mainly depends upon the favourable business conditions of the
nation. If an organisation is efficiently performing at national or domestic level than only It
would be able to go across the border (Heuson and et. al., 2015). Hence, expansion of business at
international not only helps to boost the structure of business more feasible but also enhance the
capability to compete with rivals and get competitive edge. Here in the given context the recent
development trends are discussed in the context UK’s and its impact is evaluated upon
performance of Ted Baker.
BREXIT
It will not be a trivial task to disengage the United Kingdom from the different European
institutions into which it has become woven; it will probably be the most complicated demerger
ever envisaged. Impacts involve potentially disrupting the millions of lives of European citizens
living within their home country, disrupting complicated suppliers in sectors like manufacturing
and retail, banking as well as financial industries.
UK downgrade: There are some negative impact fall upon retail and manufacturing
industries. The industries have overseas business in the EU nations would have to face major
down fall due to this vast demerger. The tariffs on goods introducing in the EU nations get
increased and the product lines related to the customs and unions also get impacted due to this
major separation. Form the economic point of view UK had to lose the trading facilities and the
cost of exports increased in EU nations. The struggling Scottish chain, which published three
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profit warnings from £ 8.5 m a year earlier in the last six months of the year to March 31, made a
pre-tax gain of just £ 200,000 on £ 131 m revenues.
UK retail sales: There were huge downfall recoded in the UK retail industry because the
supply chain structure of manufacturing and retail industries in the European nations had been
completely broken and regulatory reforms were taking too much time to revise the import and
export rates from UK to EU nations (Kenny, 2015). The cost of moving goods form UK to
European nations was consistently increased which net impact fall upon the retail sales in
European nations. There is possibility to enhance the productive initiatives in order to retrieve
the damages due to BREXIT. One of the major impact upon retail sales of Ted Baker due to
buyout of 35% stakes by David Bernstein the key stake holder of company. It is anticipated that
the retail sales will increase by 9% with new opening of stores for the eighth week of January.
The surge mainly helps in undertaking the tactical discounting policy to boost the sales for
Christmas.
Store closure: Chief executive of company stated that it is going to ram down its least
contributing stores in Britain due to difficult trading situation (Khan, 2015). Ted Baker now
predicts underlying non-tax profits for that year up to Jan 2020 to drop in around £ 50 m and £
60 m. Originally, investors had expected revenue of around £ 70 m. In February, the company
had desired about earnings.
News: The annual report for the year 2019 does not reflects an impressive news reading
one of the global lifestyle brand Ted Baker. It states that the profit before tax decreased by
26.1% to £50.9m for the month end of January, 2019. At last year it had profit of £68.8m. It
came as rival retail retailer Quiz also blamed the slump on the street for yearly profits being
wiped out. The upcoming expansion and innovative actions of company presents the favourable
results and expectations for future growth and development of business in near future (Liu,
Schmidt-Eisenlohr and Guo, 2017).
Uncertainty in the manufacturing industry: Factory doors closing in the last moment;
large steelworks lurching on bankruptcy; indications of sale hauled over one of British industry's
greatest stars (Newman and Posner, 2018). Have used the collaboration resources located at the
top either side of the products via the record button. From either the fall of UK Steel into
bankruptcy and the planned closures by Honda and Ford to the blocking of Bombardier's
aviation facilities in Quebec, there will be concerns that British industry would undergo a period
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