Authentic Brands Group (ABG) has struck a £211m deal to take Ted Baker private for the first time in a quarter of a century. 

Ted Baker Berlin store interior

ABG could manage Ted Baker’s stores in partnership with Simon Property, which owns some of the biggest malls in the US

The US conglomerate’s pursuit of the fashion retailer had looked dead in the water after it walked away from a deal in June.

But after returning to the table with a 110p per share offer, ABG is now poised to pluck Ted Baker from the London Stock Exchange, subject to shareholder approval.  

ABG founder, chair and chief executive Jamie Salter said his group was “excited to build on [Ted Baker’s] global foundation” and would focus on “licensing, wholesale, retail, digital and strategic marketing partnerships” in order to deliver “continued growth and success”. 

Retail Week takes a closer look at ABG and how it can restore Ted Baker to former glories.

This article was first published in August 27, 2021, and was updated on August 16, 2022. 

Brand builder

ABG is an American brand management company that owns a sprawling portfolio of more than 40 brands, ranging from retailers Forever 21 and Aeropostale, to global sports stars David Beckham and Shaquille O’Neal.

The business, which is headquartered in New York, sold stakes to private equity giants CVC Capital Partners and HPS Investment Partners in November 2020 and revealed plans in May 2021 to launch an IPO in the US.

However, it abandoned those plans last January, with boss Salter indicating at the time that it could seek to revisit a public listing in 2023 or 2024.  

In August 2021, ABG struck one of its biggest and most eye-catching deals, buying sportswear brand Reebok from Adidas for $2.5bn.  

It had also been in the running to buy Topshop out of administration earlier that year but ultimately lost out to Asos. 

Authentic Brands Group’s portfolio     
Above The Rim David Beckham Hart Schaffner Marx Julius Erving Prince Tretorn
Andrienne Vittadini Eddie Bauer Herve Leger Lucky Brand  Reebok  Van Heusen
Aeropostale Elvis Presley Hickey Freeman Marilyn Monroe  Shaquille O’Neal  Vince Camuto
Airwalk Forever 21  Iconic Images Misook  Sports Illustrated  Vision Streetwear
Arrow  Frederick’s of Hollywood  Jones New York  Muhammad Ali  Spyder  Volcom
Bandolino  Frye  Izod  Nautica  Tapout   
Barneys New York Geoffrey Beene  Judith Leiber  Neil Lane  Thalia Sodi  
Brooks Brothers  Greg Norman  Juicy Couture  Nine West  Thomasville   

Mastermind

Founded by Salter in 2010, ABG is a “deliberately asset-light company” that works to guide the branding and marketing of each of its holdings.

jamie salter

ABG founder and boss Jamie Salter

“Salter has a long history in branding, marketing and intellectual property,” says Coresight Research managing director Marie Driscoll.

“He manages the communication the consumer sees which drives demand, while other people execute the manufacturing, the product design and the retail sales.”

Salter has struck shrewd deals in securing the naming and image rights for global stars like Marilyn Monroe, Muhammad Ali, Beckham and O’Neal, all of which demonstrate his acumen and “asset-light” approach.  

Any companies wanting to use their names or images must do so with ABG’s approval. ABG will determine what is brand-appropriate and take a percentage of any sales. 

“The group has a guaranteed minimum royalty, so when they decide to work with someone, they’re going to protect the brand – it needs to be made well and sold in the right places, elevating the brand,” Driscoll explains. 

In this way, ABG avoids the majority of the financial risk associated with owning businesses, while still having an input in the creative direction.

ABG works in partnership with Simon Property, which owns some of the biggest malls in the US, so has a built-in landlord when its acquisitions have stores. Together they operate more than 1,600 stores.

“At the beginning, Simon just wanted ‘get my rent’, but we started turning profits very quickly, and it started to be about building a business,” says Salter. The two have a symbiotic relationship – Salter’s brands get variable rents on stores in Simon’s shopping centres, while Simon receives a percentage of royalties from sales associated with ABG’s brands.

That partnership could be at the heart of ABG’s plans for Ted Baker.

Rescue acts

ABG’s portfolio includes formerly struggling brands such as Brooks Brothers, Forever 21 and Juicy Couture, as well as department store chain Barneys. Swooping for embattled businesses has been “one of the bases of ABG’s acquisition strategy”, says Driscoll. 

“I believe that they have the skillset with marketing to take brands that need to be resuscitated and need life brought back to them – it may be that they take a brand that’s 20 years old but just hasn’t been positioned for today’s culture.

“ABG claims to be digital-first – they have a great influencer network, great marketing, great platforms that show them what leverage to pull and what categories might be a good opportunity.

“They can take a brand and distil it down to its DNA and reposition it for today, and bring renewed life to it.”

Salter has been quoted as saying he looks for “history” when identifying takeover targets.  “Does it have good archives we can bring back? Because the world repeats itself all the time. The longer the history, the better,” he says.

Salter says he knows the value of physical shops following his acquisition of Juicy Couture in 2013. ABG purchased the retailer without being able to agree a deal over its store estate, which Salter later admitted “hurt” the brand. 

“I can tell you unequivocally it’s easier to build brands with a retail footprint – touch, feel, try on,” he said.

Putting Ted back in fashion

Ted Baker certainly fits the bill for Salter and ABG – it has history, a brand that resonates across different markets and a sizeable store presence. 

Salter describes Ted Baker as “a highly regarded, uniquely British brand” with “strong fashion credibility”. He says ABG will seek “build on the brand’s global foundation through a business model focused on licensing, wholesale, retail, digital and strategic marketing partnerships”. 

ABG has already offered a window into how it will do that if the acquisition is voted through by 75% of Ted Baker’s shareholders. 

The conglomerate plans to restructure the Ted Baker business, separating it into two distinct divisions. 

The first will be a holding company, controlled by ABG, responsible for Ted Baker’s intellectual property. The second will be one or more operating companies that manage Ted Baker’s physical retail, ecommerce and wholesale operations.  

ABG says it will use its “global network of established operating partners with deep industry expertise” to grow the business and has already outlined plans to transfer full or partial ownership of the new operating companies to its trusted partners. This, on paper, would provide the business with much-needed focus.  

It highlighted the US as a particular growth opportunity for Ted Baker and suggested that its operations across the pond could be combined with those of SPARC – ABG’s retail, ecommerce and wholesale joint venture with Simon Property Group. 

“Ted Baker has not adapted to the long-term casualisation trend. This is vital for ABG to tackle to ensure that it regains relevance among shoppers”

Emily Salter, GlobalData

ABG says although no formal proposals have been drawn up, discussion with SPARC is an option it “may explore” in order to “accelerate growth and provide operating economies of scale”.

Whether or not that comes to fruition, GlobalData senior apparel analyst Emily Salter believes ABG ownership will “give Ted Baker the stability it needs to turn its fortunes around”. 

At a time when consumers are tightening their belts amid a deepening cost-of-living crisis, clothing and footwear have been hard hit. 

In the year ending January 29, Ted Baker posted a pre-tax loss of £44.1m, despite a 20.5% uplift in sales year on year to £428.2m. 

Although sales in the first quarter of its current financial year improved at a similar rate, Ted Baker conceded it was “mindful of consumer squeeze from inflation and cost of living pressures”. 

GlobalData’s Salter believes a brand marketing overhaul, and a shifting of the mix towards more casualwear, will be required to make Ted Baker better appeal to a broader audience.

“Even before the pandemic, Ted Baker was suffering as its distinctive brand handwriting limits its audience. Covid-19 only compounded its troubles,” she says. 

“It fell victim to the lack of demand for occasionwear and formalwear in 2020 and 2021, and although occasionwear is popular again this summer as consumers flock to weddings and other postponed events, Ted Baker has not adapted to the long-term casualisation trend. This is vital for ABG to tackle to ensure that it regains relevance among shoppers.”

Given ABG’s track record, few would bet against it putting Ted Baker firmly back in fashion.