Ted Baker is a designer-led fashion brand, offering aspirational clothing and accessories in a distinct, quirky style.  

It operates stores and concessions across the UK, continental Europe, North America, South Africa and Asia, with a supporting ecommerce business. The retailer traded through some 375 stores and concessions at end-January 2022, of which 170 or so are in its UK and Europe division.

Its UK wholesale business serves countries across the world, particularly in Europe, and there is a wholesale business in the US.

Territorial retail store licences cover the Middle East, Asia, and Australasia, and also wholesale operations in some of these areas. Product licences include lingerie and sleepwear, fragrance, watches, footwear, eyewear, suiting, neckwear and childrenswear. Ted Baker’s traditionally high profit margins have come under huge pressure in recent years as the retailer has turned to increased promotional activity in response to tough trading conditions.

Proving particularly tumultuous, 2019 brought numerous profit warnings and the resignation of charismatic founder and former CEO Ray Kelvin followed by the exit of replacement boss Lindsay Page and executive chair David Bernstein.      

Around the same time, consultancy firm AlixPartners was drafted in to conduct a “wide-ranging review” of Ted Baker’s business model and costs.

Ted Baker narrowed its pre-tax loss at reporting level to £44.1m in FY2021, while total sales increased 20.5% to £428.2m.

New chief executive officer and former Debenhams CFO Rachel Osborne set out the retailer’s recovery strategy in mid 2020, which has been critical in light of the impact of the pandemic. The strategy is built on the retailer’s strengths, including its brand, channel, product and geographical mix and investment in technology and logistics.

The three-pronged strategy comprises three “building blocks”: stabilising the business, including “rethinking Ted Baker’s vision and commercial strategy”; driving growth, through re-energising the brand and drawing new customers; and operational excellence, such as a digital-first approach.

To this end, the retailer partnered with SaaS provider BigCommerce on a new website, launched in March 2022, to enable it to expand its international presence as a digital-first brand. See ecommerce strategy

Ownership change

In March 2022 Ted Baker received two non-binding proposals from American-based private equity firm Sycamore Partners, but both were rejected because the retailer felt they significantly undervalued the business. The second proposal valued Ted Baker at £253.8m.

The company then received an “improved proposal” from Sycamore, as well as a bid from a third party interested in the company. Ted Baker did not disclose the value of either of the fresh bids for the business, but due to the increased interest, agreed upon a formal sales process following discussions with the UK Takeover Panel and in May 2022 announced that it was proceeding with a “preferred counterparty”.

Some doubt was cast over the proposed sale of Ted Baker back in in June after the preferred bidder pulled out of a deal in which they had bid around 160p per share. The retailer explained that it had been “informed by the preferred counterparty last night that it did not intend to proceed with an offer for the company”. The decision was reported to be linked to concerns around consumer confidence and difficulties on the UK high street. 

Although Sky News had reported that US-based Authentic Brands Group (ABG), which owns Forever 21, Reebok and Brooks Brother, had emerged as the frontrunner to buy Ted Baker the retailer initially refused to name the party in question.

However, in August, months of speculation were ended when Ted Baker accepted a £211m takeover bid from Authentic Brands Group. The deal, which is worth 110p per share, a premium of some 18.2% to Ted Baker’s share price of 93.1p when markets closed on 15 August 2022, needed more than 75% of investors to vote in its favour before it was made official. See Strategy

Innovation rating: 2

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