Ted Baker owner Authentic is reportedly mulling a CVA of the fashion retailer following the announcement it has cut ties with AARC, the Dutch retail group running its stores and ecommerce business across the UK and Europe.
Authentic Brands Group, which bought Ted Baker in August 2022 in a deal worth £211m, is close to appointing advisers on a restructuring of Ted Baker that aims to reduce its rent bill, The Telegraph reported.
The newspaper reported that consultants at Teneo are “favourites” to lead negotiations at the brand following a beauty parade of advisers, which also includes Begbies Traynor and another unnamed firm.
A City source said: “Ted Baker is one of the few big high street retailers that is yet to reset rents to reflect current market rates. It is hugely over-rented.”
Authentic is expected to look at cost-saving measures including a potential CVA, which could see both rent reductions and store closures if approved by landlords and creditors.
The news comes after Authentic confirmed in a statement on Friday that it had parted ways with AARC, which was appointed in April 2023 to run its shops and online operations in the UK and Europe.
Authentic said in a statement: “We have terminated Authentic’s relationship with AARC, which, in keeping with our licensing model, owned and operated Ted Baker’s retail stores and ecommerce platform in the UK and Europe.
“Despite our efforts to support AARC through recent financial difficulties, including providing the business with a short-term loan, it has consistently failed to inject promised funding into the business and meet its financial obligations to Authentic.
“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. A new independent board has been brought in to manage operations in its place.
“The new board will explore all options to ensure the future of the business in consultation with Authentic and other key stakeholders. 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 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.”