OUT OF FASHION
Ted Baker falls into administration putting 46 UK stores and almost 1,000 jobs at risk
Its owner said it was exploring several cost-saving measures to shore up the company's 'soaring' costs
FASHION giant Ted Baker has fallen into administration, putting dozens of stores and hundreds of jobs at risk.
The retailer, who currently runs 86 stores across the UK and employs 975 people, filed a Notice of Intention just days ago.
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No Ordinary Designer Label (NODL), owned by Authentic Brands Group (ABG) and trading as Ted Baker, has appointed Teneo Financial Advisory Limited to administrate the brand for now.
ABG is said to be "in advanced discussions" with potential buyers for the company.
The news comes days after NODL said that it planned to appoint administrators, citing "damage" done during a partnership and the "significant level of arrears" that had built up during a partnership with Dutch company AARC Group.
No Ordinary Designer Label decided to end the partnership with AARC in January, saying that the partner had not met its promises to inject cash into the business.
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Benji Dymant, joint administrator at Teneo, said: "The appointment of joint administrators comes seven weeks after the termination of NODL's operating partnership with AARC on January 29 2024.
"That decision was made after AARC failed to meet financial obligations and inject promised funding into the business.
"The business traded well below forecast in the fourth quarter of 2023 and built up a significant level of arrears.
"This has meant that the company requires the protection of a moratorium to continue to trade and the director has taken the difficult decision to place the company into administration."
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Mr Dymant added that despite falling into administration, Ted Baker will continue trading as normal "and customer orders will still be fulfilled".
"Ted Baker is an iconic British brand with strong partners around the world," he said.
The secret bargain shop where big retailers like River Island and Ted Baker send their discontinued or out of season stock
Authentic has advised that it is in advanced discussions with several potential operating partners to take over the Ted Baker UK and European operations and bring the business back to full health.
"We appreciate that this is a very difficult and uncertain time for all involved and we would like to take this opportunity to thank Ted Baker team members and partners for their efforts and ongoing support.”
"Authentic has advised that it is in advanced discussions with several potential operating partners to take over the Ted Baker UK and European operations and bring the business back to full health."
NODL will continue to trade through both the UK website and stores, whilst Authentic continues its discussions with interested parties.
NOTICE OF INTENTION
Earlier this week, on Tuesday, No Ordinary Designer Label filed for administration with a Notice of Intention.
John McNamara, chief strategy and transition officer for Authentic Brands Group, said: "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."
ABG said it was exploring several cost-saving measures to shore up the company's "soaring" costs in February.
This followed ABG, which also owns Reebok and Juicy Couture, rescuing the high street brand as part of a £211 million deal in 2022.
YEARS OF TURMOIL
Ted Baker started struggling in 2019 after founder Ray Kelvin quit his role following allegations of harassment.
Several profit warnings, a statement advising the stock market company profits will be lower than expected, followed.
In 2020, the retailer said it would axe 160 jobs, branding 2019 a "challenging year".
Ted Baker isn't the only retailer left struggling on the high street.
The Body Shop fell into administration just last month, putting hundreds of stores at risk of closure.
On February 29, it announced it would close 75 stores including in Basildon, Bexleyheath and Carlisle.
Administrators FRP said the retailer would be turning its attention more to online sales and wholesale.
Wilko and Paperchase also both filed for administration last year in a blow for the high street.
It saw hundreds of shops close and thousands of workers lose their jobs.
HIGH STREET CRISIS
Retailers have been feeling the squeeze since the pandemic, while shoppers are cutting back on spending due to the soaring cost of living crisis.
High energy costs and a move to shopping online after the pandemic are also taking a toll, and many high street shops have struggled to keep going.
The high street has seen a whole raft of closures over the past year, and more are coming.
The number of jobs lost in British retail dropped last year, but 120,000 people still lost their employment, figures have suggested.
Figures from the Centre for Retail Research revealed that 10,494 shops closed for the last time during 2023, and 119,405 jobs were lost in the sector.
It was fewer shops than had been lost for several years, and a reduction from 151,641 jobs lost in 2022.
The centre's director, Professor Joshua Bamfield, said the improvement is "less bad" than good.
What does going into administration mean?
When a company enters into administration, all control is passed to an appointed administrator.
The administrator has to leverage the company's assets and business to repay creditors any outstanding debts.
Once a company enters administration, a "moratorium" is put in place which means no legal action can be taken against it.
Administrators write to your creditors and Companies House to say they've been appointed.
They try to stop the company from being liquidated (closing down), and if it can't it pays as much of a company's debts from its remaining assets.
The administrator has eight weeks to write a statement explaining what they plan to do to move the business forward.
This must be sent to creditors, employees and Companies House and invites them to approve or amend the plans at a meeting.
A Notice of Intention is used to inform concerning parties that a company intends to enter administration.
It is a physical document which is submitted to court, usually by directors aiming to prevent a company from being liquidated.
Like with a standard administration process, a Notice of Intention stops creditors from taking out any legal action over a company while they try and rectify the business.
Although there were some big-name losses from the high street, including Wilko, many large companies had already gone bust before 2022, the centre said, such as Topshop owner Arcadia, Jessops and Debenhams.
"The cost-of-living crisis, inflation and increases in interest rates have led many consumers to tighten their belts, reducing retail spend," Prof Bamfield said.
"Retailers themselves have suffered increasing energy and occupancy costs, staff shortages and falling demand that have made rebuilding profits after extensive store closures during the pandemic exceptionally difficult."
Alongside Wilko, which employed around 12,000 people when it collapsed, 2023's biggest failures included UK Flooring Direct, Planet Organic and Tile Giant.
The Centre for Retail Research said most stores were closed because companies were trying to reorganise and cut costs rather than the business failing.
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However, experts have warned there will likely be more failures this year as consumers keep their belts tight and borrowing costs soar for businesses.
Last year, around 14% of insolvencies were in retail businesses, according to official figures.
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