What next for the Ted Baker brand?

At the height of its success Ted Baker was so popular it was common for people to claim they knew the eponymous Ted. Now as the brand slips into administration, with the intention of ultimately finding a new owner, what is the condition of the business on offer?

Ted Baker has been through a complicated period in recent years. Founder Ray Kelvin stepped down from his role in March 2019 after allegations of inappropriate behaviour that included ‘forced hugging’ of staff. Amid increasing competition and the pandemic-enforced shift to casual styles fit for working from home, Ted Baker was eventually taken over by Authentic Brands Group (ABG) in 2022.

That takeover followed a pre-tax loss of £43m in the year to January 2022 – from sales of nearly £320m – during which time Ted Baker was operated in Europe by holding company No Ordinary Designer Label (NODL). Last month ABG cut ties with AARC, a Dutch company appointed to run the business in 2023.

While the staff headcount has been cut substantially since, ABG is blaming its relationship with AARC for the brand’s current status. ABG claims AARC did not meet financial obligations that included an injection of capital.

There is still value in the brand, but you would need somebody with creative vision to take it to where it could potentially go.

Danni Hewson, AJ Bell

“Despite our tireless efforts, the damage done during a period under AARC, in which NODL built up a significant level of arrears, was too much to overcome,” says ABG chief strategy and transition officer John McNamara.

“We wish that there could have been a better outcome for the Ted Baker employees and stakeholders. It is hopefully some consolation for customers that NODL will continue to trade online and in stores. We remain focused on securing a new partner to uphold and grow the Ted Baker brand in the UK and Europe where it began.”

Head of financial analysis at investment platform AJ Bell, Danni Hewson, says Ted Baker was facing problems well before 2024, dating all the way back to the departure of Kelvin.

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“Ted Baker has been in trouble really since the whole ‘forced hugging’ issue. He [Kelvin] was the brand. He didn’t name it after himself, but it did feel as though this mythical character he had created, Ted Baker, was him,” she reflects.

“He just had vision and when that vision chimed with really good marketing and fast turnaround – and with a consumer that was willing to pay, that ‘got’ what Ted Baker was and wanted to be associated with that image and lifestyle – that just made for an incredibly successful brand. It just lost its way.”

It isn’t just Kelvin who is missed. Hewson credits former Ted Baker womenswear director Catherine Scorey Jobling as being a driving force behind the brand’s success. Scorey Jobling joined All Saints as chief operating officer in 2019.

“Between the pair of them they just got it right,” says Hewson, who adds that Ted Baker is in danger of following a number of high profile fashion brands that became shadows of their former selves once the founders left.

Still aspirational?

What appeal does this leave for a potential new buyer of the Ted Baker brand?

According to YouGov’s BrandIndex, Ted Baker scores an index score of 15.7, up on premium brand rivals such as Michael Kors (6.3) and Polo Ralph Lauren (13.3).

Indeed, the brand has maintained a relatively stable index score since it was first tracked by YouGov in November 2019 after Kelvin’s departure. Back then the brand notched up an index score of 14.7 and that figure has rarely dipped below the 11 mark since.

Ted Baker’s performance over the past four weeks, compared to the same period last year, suggests its brand health is on the up. This month the brand notched up an index score of 15.7 – 11th place on the ranking of high street brands – versus an index score of 13 and 14th place the same time last year.

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From a reputational perspective Ted Baker scores 22.7 on BrandIndex, higher than the likes of Michael Kors (14.2), Boden (9.9) and Next (18.6). The level is, however, lower than the reputation score for high street heavyweight Marks & Spencer (36.2).

“The brand does still resonate,” says Hewson, noting that younger buyers favour Ted Baker for smaller gift items even if they can’t afford to buy fashion there.

“The brand is seen as an upmarket brand, it is still aspirational,” she adds.

However, Hewson cautions that current Ted Baker products are difficult to distinguish from high street rivals.

“They look like Zara, they look like Next. That’s the issue,” she notes.

“There is still value in the brand, but you would need somebody with creative vision to take it to where it could potentially go. Otherwise it could limp on quite happily and find a home in a Next or a Frasers, and just bumble along. Without a real sense of fashion, style and love it is just going to vanish.”