The Future Path of Ted Baker: A Journey of Revival

Ted Baker

During its peak, Ted Baker was incredibly popular, to the point where it was a common occurrence for individuals to falsely boast about knowing the founder, Ted. However, as the brand now faces administration and seeks a new owner, what is the current state of the business being presented for sale?

Ted Baker has faced challenges in recent years, with founder Ray Kelvin stepping down in March 2019 amidst allegations of inappropriate behavior, including 'forced hugging' of staff. As competition increased and the pandemic led to a shift towards casual work-from-home styles, Ted Baker was eventually acquired by Authentic Brands Group (ABG) in 2022.

Following a pre-tax loss of £43m in the year ending January 2022, despite sales of nearly £320m, Ted Baker was overseen in Europe by holding company No Ordinary Designer Label (NODL). Recently, ABG decided to end their partnership with AARC, a Dutch company that had been managing the business since 2023.

ABG has significantly reduced its staff count recently. The company is attributing the current state of its brand to its partnership with AARC. ABG alleges that AARC failed to fulfill its financial commitments, such as providing capital injection.

Despite the challenges, ABG believes that there is still worth in the brand. However, they emphasize the importance of having someone with a creative vision to unlock its full potential.

ABG chief strategy and transition officer John McNamara acknowledges that despite their hard work, the damage caused by NODL's arrears during the AARC period was too severe to recover from, according to Danni Hewson from AJ Bell.

We hope for a better outcome for the Ted Baker employees and stakeholders. Although NODL will still be operating online and in stores, we are actively seeking a new partner to support and expand the Ted Baker brand in its home markets of the UK and Europe.

According to Danni Hewson, Head of financial analysis at investment platform AJ Bell, Ted Baker had been experiencing challenges even before 2024, tracing back to the departure of Kelvin.

Ted Baker has been facing difficulties since the 'forced hugging' incident. Kelvin was the face of the brand, even though it wasn't named after him. It seemed like the character he created, Ted Baker, was a reflection of himself.

He had a strong vision that, combined with effective marketing and quick product turnover, resonated with consumers who understood and desired to be part of the Ted Baker lifestyle. This led to the brand's remarkable success. However, along the way, it veered off course.

Kelvin is not the only one missed. Hewson acknowledges Catherine Scorey Jobling, former Ted Baker womenswear director, as a key figure in the brand's success. Scorey Jobling became the chief operating officer of All Saints in 2019.

Hewson believes that both Kelvin and Scorey Jobling played a crucial role in the success of the brand. He also expresses concern that Ted Baker might suffer the same fate as other fashion brands that lost their essence after their founders departed.

Still aspirational?

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

Ted Baker has a BrandIndex score of 15.7, surpassing competitors like Michael Kors (6.3) and Polo Ralph Lauren (13.3), according to YouGov.

Since November 2019, when YouGov began tracking the brand after Kelvin's departure, Ted Baker has consistently maintained a stable index score. Initially starting at 14.7, the score has rarely fallen below 11.

Ted Baker's recent performance shows improvement compared to last year. This month, the brand scored 15.7 on the index, landing in 11th place among high street brands. Last year, it scored 13 and ranked 14th.

In terms of reputation, Ted Baker's BrandIndex score is 22.7, higher than Michael Kors (14.2), Boden (9.9), and Next (18.6). However, it falls below Marks & Spencer's reputation score of 36.2.

Despite the fact that younger buyers may not be able to afford Ted Baker's fashion, they still prefer the brand for smaller gift items. "The brand is still appealing to younger customers," says Hewson.

In addition, Hewson mentions that Ted Baker is perceived as a high-end brand that is still considered aspirational by consumers.

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.

The brand still holds value, but it requires someone with creative vision to unlock its full potential. Otherwise, it may continue to exist without much growth, possibly being acquired by Next or Frasers and simply coasting along. Without a genuine passion for fashion and style, it runs the risk of fading into obscurity.

Editor's P/S:

Ted Baker's recent struggles highlight the challenges facing traditional fashion brands in the face of changing consumer preferences and increased competition. The departure of founder Ray Kelvin and the subsequent allegations of inappropriate behavior have taken a toll on the brand's reputation, while the shift towards casual work-from-home styles has eroded its core customer base.

Despite these challenges, Ted Baker remains a recognizable brand with a loyal following. Its strong BrandIndex score and aspirational image suggest that there is still value in the name. However, the brand needs a creative visionary to unlock its full potential and differentiate it from its high street rivals. Without a clear direction, Ted Baker risks becoming another faded fashion icon, coasted along by larger retailers. from competitors. To unlock its full potential, Ted Baker needs a new owner with a clear creative vision and a commitment to innovation. Without such leadership, the brand may continue to struggle or even fade into obscurity, becoming a mere footnote in the annals of fashion history.