Authentic Brands Group, the proprietor of Reebok, secures an agreement to acquire Ted Baker.
Authentic Brands Group, a renowned conglomerate that owns several notable retail labels, has agreed to acquire U.K. fashion company Ted Baker for approximately 211 million pounds ($255 million) in cash. This acquisition, as outlined in a cooperation agreement between the companies, is expected to reposition Ted Baker as an intellectual property holding company under the control of ABG, while one or more operating companies will manage its retail, e-commerce, and wholesale operations.
ABG expresses optimism about taking over the Ted Baker brand, claiming that it is well-prepared to foster its growth and boost its value. The company highlights potential growth opportunities for the brand in North America due to its strong brand recognition among consumers.
The conglomerate already owns a 50% stake in Sparc Group, a joint venture with Simon Property Group. Sparc operates over 1,600 stores in North America, along with e-commerce and wholesale operations. ABG is exploring the possibility of combining the Ted Baker operations with Sparc.
"Ted Baker is a highly respected, unique British brand with a strong fashion reputation that resonates worldwide," commented Jamie Salter, CEO of ABG. "We are excited to build upon the brand's global foundation through a business model centered on licensing, wholesale, retail, digital, and strategic marketing partnerships."
Ted Baker's board is endorsing the deal with shareholders encouraged to vote in favor of it. According to GlobalData senior apparel analyst Emily Salter, the acquisition gives Ted Baker the stability it needs to turn its fortune around following a downtrend in popularity and challenges posed by consumers cutting back on clothing and footwear expenditures during the cost of living crisis.
In the past, Ted Baker faced issues even before the pandemic and failed to adapt to the trend of casualization. This challenge is crucial for ABG to address in order to restore the brand's relevance among consumers.
After reports of a potential sale for Ted Baker emerged this spring, private equity firm Sycamore Partners emerged as a potential buyer. However, Sycamore ultimately dropped out of the running by the end of May. Further complications for the brand included the resignation of its CEO Ray Kelvin in 2019 amid allegations of misconduct and an accounting scandal in 2020 regarding the overstatement of stock value on its balance sheet.
Founded by Ray Kelvin in 1987, Ted Baker initially started as a men's shirting store in Glasgow. Since then, it expanded to a portfolio of stores and concessions across various continents and offers several collections, including menswear, womenswear, accessories, fragrance, and watches.
- ABG plans to leverage AI and digital marketing strategies to boost Ted Baker's value in the fashion-and-beauty markets, aiming to recreate its global success.
- The acquisition of Ted Baker by ABG signals a strategic move towards expanding its business in the fashion sector, eyeing potential growth in the space of lifestyle and finance.
- With the acquisition finalized, ABG plans to reposition Ted Baker, utilizing its intellectual property for growth opportunities in the retail markets.
- Amidst the challenges posed by the pandemic and the cost of living crisis, ABG's acquisition of Ted Baker presents a promising opportunity to revitalize the brand in North America and beyond.
- The acquisition of Ted Baker by ABG includes investigating the integration of its operations with those of Sparc Group, with the aim to optimize its retail, e-commerce, and wholesale performance.
