Fashion retailer Ted Baker has issued a warning that profits for the current financial year will be below market expectations.

The fashion retailer, which has a store at Gloucester Quays and an outlet at Cavendish House in Cheltenham, said the lower profits were due to foreign exchange movements, a write-down on the value of inventory and IT upgrades, as reported by Retail Gazette.

For the financial year ending 26th January, Ted Baker forecast that profit before tax would be in the region of £63 million, significantly lower than the £73.5 million reported last year.

The profit warning shouldn't come as a surprise. It follows the retailer's announcement in October that the second half of the year would be challenging, as consumers cut back on spending. Despite this, the company saw a 12.2 per cent rise in sales over the Christmas period.

It's been a difficult time for Ted Baker, with founder and chief executive Ray Kelvin currently on leave of absence, while an investigation into allegations of inappropriate behaviour is conducted.

The retailer said the profit warning does not include one-off charges due to the investigation, nor any debts in relation to House of Fraser.