Ted Baker founder backs buyout by Sycamore Partners
Ted Baker founder Ray Kelvin is reported to have given his backing to a proposed buyout of the British brand by Sycamore Partners.
Kelvin established the fashion and lifestyle retailer in 1988 under the name of his alter ego and departed in March 2019; he still retains an 11.5% stake in the business. According to The Sunday Times, Kelvin is said to believe that the US investor can inject the necessary funds into the business to revive its fortunes.
Last month Ted Baker rejected two bids from Sycamore Partners, the latter of which valued it at £254 million, saying it felt it was better positioned as a plc to bounce back from the effects of the pandemic. However Sycamore came back with a third bid and having received another unsolicited bid, the business formally put itself up for sale this month. It has been said the board would only accept an offer in excess of £310 million.
Ted Baker has had a rocky time following the departure of Kelvin, who left following allegations of staff harassment, which he as consistently denied. After he left, his right hand man Lindsay Page took over as CEO but by the end of 2019 Page too had stood down following profit warnings, accounting errors and the business swinging to a loss.
Former Debenhams CFO Rachel Osborne had been appointed as CFO in the autumn of 2019 and by March 2020 had been appointed as CEO. Osborne guided Ted Baker through the pandemic overseeing the sale of its HQ in King's Cross, the so-called Ugly Brown Building, and a share placement to raise £100 million cash to shore up the business.
It has undergone a recovery in the post-lockdown era reporting a 50% leap in quarterly revenues in September 2021 citing the benefits of pulling back on pandemic discounting. It has also relaunched its website to drive global growth and signed a new franchising deal with Aldridge Group to grow its physical retail presence.
The company has said that its formal sale process, which the UK Takeover Panel has agreed to, will allow it to conduct talks with interested parties but "there can be no certainty that an offer will be made, nor as to the terms on which any offer will be made".