Follow us

Menu
PARTNER WITH USFREE NEWSLETTER
VISIT TheIndustry.beauty

Ted Baker: Can running a fashion brand at arm's length ever be truly authentic?

Marcus Jaye
12 April 2024

Can running fashion brands at arm’s-length ever really work? That’s the question being asked surrounding the recent demise of Ted Baker’s UK and European arm. 

One of the many labels held by the giant American Authentic Brands Group, Ted Baker sits alongside Reebok, Brooks Brothers, Sperry and Hunter, and nearly 50 others, in a licensing model where the group uses multiple partners to design and produce products under each brand umbrella for different geographic markets.

Authentic Brands snapped up Ted Baker in October 2022 for £211 million, and appointed Teneo as administrators in March after it cut ties with AARC – the Dutch retail group it put in charge of running Ted Baker's 46 stores and e-commerce businesses across the UK and Europe (known as No Ordinary Designer Label Limited) – after it failed to inject promised investment per the partnership agreement. Teneo has just announced 15 UK store closures with the loss of 245 jobs, leaving some 31 stores in the portfolio. Teneo identified 11 of the loss-making stores for closure while landlords pulled the plug on a further four.

It has been a confusing time for Ted Baker, Frasers Group and Next are said to be circling, with many lamenting its loss already, yet Authentic Brands won’t see a multi-million dollar investment fail and the brand name remains strong. ABG will simply seek a new partner and, indeed, the latest word on the street is that US license holder OSL is the favourite for the job. Other categories with the Ted Baker name haven’t been affected.

Ted Baker

Ted Baker Regent Street (Alamy)

The business model of using outside partners to drive brands, particularly when it comes to something that needs detail like formal men’s and womenswear is difficult. Premium businesses like Ted Baker (which to this point had been driven by a singular vision that was evident across all brand touch points) need to be managed tightly and be laser focused on the customer and the target market.

A brand has to be more than a name ironed onto product (many consumers are sophisticated enough to know this), particularly if that brand is to have longevity and loyalty

Arguably, Ted Baker’s demise centres around founder Ray Kelvin’s ousting in 2019 (for more on that and the brand's history, read our feature here), but economic factors will have played a huge part in reducing sales and increasing costs.

Ted Baker // new retail Basingstoke

Ted Baker menswear

Launched in 2010 by Canadian Jamie Salter, New York-based Authentic Brands Group was valued at $20 billion in June 2023 after it raised $500 million from growth-equity investor General Atlantic. The group has been fast acquiring distressed brands and also investing in bankable star names. In 2022, it acquired a majority stake (55%) in DB Ventures Limited, which holds the core activities of the David Beckham brand. Most recently, Authentic has agreed to buy the sportswear label Champion from HanesBrands for just over $1 billion.

Authentic describes itself as “a unified platform that integrates M&A, brand strategy, creativity and digital innovation to unlock the power of its global Lifestyle and Entertainment portfolio. As the world’s largest sports and entertainment licensing company, Authentic connects strong brands with best-in-class partners to optimise long-term value in the marketplace."

It says it currently has $29 billion in global retail sales with over 1,500 partners, 13,000 stores in 150 countries with 382,000 points of sale.

Like all business that want to scale fast, you don’t get your hands dirty and rely on others to do the hard work and to know their particular markets and specialisms. With this number of brands, Authentic won’t miss a few as they disappear and will be happy to sacrifice them as long as others are growing. It is doing the clever thing of spreading its risk across multiple brands, yet it still needs to be across the detail of each brand and have clear oversight if it is to remain healthy in a struggling retail market.

Much of Authentic’s huge valuation is built on this and future growth. But it is only as strong as its partners. Farming out brand names to others is nothing new, but at this scale it feels different and, ultimately, is it really authentic?


Free NewsletterVISIT TheIndustry.beauty
cross