Ted Baker owner Authentic terminates contract with UK retail partner AARC
Ted Baker owner Authentic Brands Group has terminated its contract with AARC, which operated the British-founded brand's retail stores and e-commerce platform in the UK and Europe.
US-based Authentic Brands Group, which owns a raft of fashion and activewear brands including Hunter, Juicy Couture and Reebok, acquired the Ted Baker brand for £211 million in August 2022.
In keeping with its licensing model it entered into a number of agreements to operate and develop the brand, such as with Aldo to develop footwear and handbags and AARC to run its retail stores and e-commerce in the UK and Europe. Brand development group PDS also acquired the Ted Baker Design Group, to handle design and merchandising, as part of its strategic partnership with Authentic.
This shift to an outsourced model led to the shedding of a number of roles in areas such as sourcing and production at the Ted Baker HQ.
AARC, a Dutch retail management company, was appointed in April last year but soon after ran into financial difficulties and Authentic was obliged to step in with a loan to support it. It was reported at the time that AARC had been working with FTI Consulting to explore longer term financial support to underpin the Ted Baker brand.
A source told TheIndustry.fashion that AARC was recently investigating the possibility of a CVA and this weekend Authentic confirmed it had terminated its contract, but stressed it was still committed to the Ted Baker brand.
The statement read: “We have terminated Authentic’s relationship with AARC, which, in keeping with our licensing model, owned and operated Ted Baker's retail stores and e-commerce 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 1600 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.”