ABG is reportedly considering a Company Voluntary Arrangement for Ted Baker, after endings its deal with AARC.
Reports suggest the relationship collapsed after AARC failed to inject promised finding into the business and meet its financial obligations to Authentic. Authentic has reportedly removed AARC as a shareholder, with a new independent board having been brought in to manage operations in its place.
ABG and AARC did not return Just Style’s request for comment.
Industry onlookers have expressed surprise at the move. Neil Saunders, analyst at GlobalData, said the move is “unexpected” as Authentic usually “sets up very reliable partnerships and works closely with its partners to develop and grow brands.”
However he understands the move was prompted by AARC’s failure to meet its obligations leading to ABG concluding the best course of action is a restructure of the business.
“The central problem appears to have been getting AARC to make promised funding and investments into channels like stores and ecommerce, which are critical to the smooth running of the business. As it has essentially lost its partner, Authentic had to explore other courses of action, including an overhaul of the business via a CVA.”
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Meanwhile, Pippa Stephens, apparel analyst at GlobalData, said AARC had only been appointed to operate Ted Baker’s stores and online operations in April 2023 so the move is a surprise.
But while globally “it means very little” as Authentic has other partners in other regions who are still supporting the brand, according to Saunders, there are likely to be some store closures and a period of disruption as Authentic reshapes the business.
Stephens believes it could give the Ted Baker brand a much-needed refresh after a period of struggling post-pandemic.
Stephens added: “The brand has lost desirability due to its focus on formalwear and occasionwear, and long struggled to keep up with trends. It also has a very distinct product handwriting, which will deter shoppers now its perceptions have waned. While this sequence of events is not ideal, closing its poorer performing stores will allow Ted Baker to place more focus and investment into its more profitable locations, giving it a greater likelihood of turning itself around in the future.”