Retailer Ted Baker has become the latest big name British fashion firm to crash out of business after its owners said it was going into administration putting hundreds of jobs at risk.
The fashion group is to appoint insolvency administrators to No Ordinary Designer Label (NODL), the part of the business that runs Ted Baker’s 46 shops and website. Advisory firm Teneo is reportedly being lined up to handle the process.
US owners Authentic Brands, the group behind brands such as Reebok and David Beckham, said the retailer would continue to operate online as well as through its stores pending the administration process.
John McNamara, chief strategy officer for Authentic Brands Group, said: “We wish that there could have been a better outcome for the Ted Baker employees and stakeholders.
“We remain focused on securing a new partner to uphold and grow the Ted Baker brand in the UK and Europe where it began.”
The company employs more than 900 staff and currently operates 46 stores across the country, as well as online and through department store concessions.
Authentic Brands bought Ted Baker in 2022 in a £211m deal following a series of profit warnings.
Mr McNamara put the blame for the collapse squarely on the Dutch firm, AARC which was operating the stores and website until six weeks ago when the two firms fell out.
After the bust up Authentic said it had tried to support AARC ‘through recent financial difficulties’ including the offer of a short term loan. It accused the Dutch firm of ‘failing to inject promised funding into the business and meet its financial obligations to Authentic’.
“Despite our tireless efforts, the damage done during a period under AARC in which NODL built up a significant level of arrears was too much to overcome,” Mr McNamara said.
“None of us expected this. We were given assurances and have been disappointed. We’re limited on what we can disclose at this stage, but we can assure all concerned that we are focused on addressing this issue to continue to support the Ted Baker brand.
“As an important first step towards protecting the brand and our financial investment, we have used rights under our loan to remove AARC as a shareholder.” AARC has been approached for comment.
Authentic had appointed a new independent board to manage Ted Baker operations and would explore ‘all options’ to ensure the future of the business it said.
Mr McNamara said Ted Baker “has strong partners in place around the world and continues to be a powerful brand in the Authentic portfolio. Despite the difficulties facing the UK and European business, we remain committed to Ted Baker and are confident in the brand’s long-term success under Authentic’s stewardship.”
“We will draw on our extensive experience as an owner of 50 brands and with over 1,600 partners to represent our interests.”
Ted Baker will be the latest UK retailer to fail. Recent figures show that so far this year 11 retailers have failed already forcing the closure of 260 stores and the loss of 10,516 jobs. The Body Shop UK was among the high profile closures as retailers were squeezed by inflation, rising costs and reduced consumer spending.
Poor trading during the so-called Golden quarter which many retailers rely on to get them through the quieter months hit many particularly hard. Fashion retail has also been hit by competition from the online retailers.
Like many retailers Ted Baker suffered during the pandemic but experts say it was struggling before lock down. During 2019, the company issued four profit warnings and even blamed unseasonably warm weather during what would traditionally be the beginning of the Autumn/Winter selling season. It was also forced to admit that it had made a balance sheet blunder by overstating the value of clothing in its inventory by as much as £25m.
The profit warnings followed a period of disarray for the retailer after its founder Ray Kelvin was forced to step down from the business after allegations of ‘forced hugging’ and harrassment of staff.
