Reebok owner Authentic Brands Group closes deal to acquire Ted Baker

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A quick dive:

  • Authentic Brands Group has reached an agreement on its proposed acquisition of British fashion company Ted Baker for approximately £211 million ($255 million) in cash pursuant to a collaboration agreement between the companies.
  • ABG intends to separate Ted Baker into an intellectual property holding company, which will remain under ABG’s control, and one or more operating companies that will manage the brand’s physical retail, electronic and wholesale operations.
  • “ABG believes it will be a good custodian of the Ted Baker brand and is well positioned to accelerate its growth and increase its value,” the company’s agreement says.

Dive Insight:

Authentic Brands Group, which owns some of the most recognizable brands in retail, including Brooks Brothers, Reebok, Eddie Bauer and Forever 21, is poised to add another apparel company to its roster.

The conglomerate believes there is “significant growth opportunity” for the brand in North America due to strong consumer acceptance. ABG currently owns 50% of Sparc Group, a joint venture with Simon Property Group. Sparc operates more than 1,600 stores in North America, as well as e-commerce and wholesale. Under the agreement, ABG is exploring the possibility of combining the operations of Ted Baker and Sparc. Sparc already has operations under a number of holding brands.

“Ted Baker is a highly regarded, uniquely British brand whose strong fashion credentials resonate with consumers around the world,” Jamie Salter, CEO of ABG, said in a statement. “We are excited to build on the brand’s global foundation through a business model focused on licensing, wholesale, retail, digital and strategic marketing partnerships.”

Ted Baker’s board unanimously recommends that shareholders vote in favor of the transaction.

“This will give Ted Baker the stability it needs to turn its fortunes around as it has fallen out of favor with shoppers and faces more difficulties as consumers cut spending on clothing and footwear amid a cost-of-living crisis,” Emily Salter, senior apparel analyst GlobalData said in emailed comments.

The brand suffered even before the pandemic and did not adapt to the trend of casualization, according to Salter GlobalData. “This is vital for Authentic Brands Group to ensure it regains relevance with shoppers,” Salter said.

Talking about selling Ted Baker was distributed this spring, and private equity firm Sycamore Partners is acting as a potential buyer. However, by the end of May, Sycamore was dropped out running

The past few years have been tough for the apparel company. In 2019, the CEO of Ted Baker is Ray Kelvin left his post amid allegations of misconduct. The following year, the company had an accounting scandal reported that the share price on its balance sheet was overstated by £58m – more than double previous estimates.

Ray Kelvin had an idea for Ted Baker in 1987 on a fishing trip. The following year saw the opening of the first store in Glasgow, which became famous for its men’s shirts. Ten years later, Ted Baker became a public company on the London Stock Exchange. Ted Baker currently has a portfolio of stores and concessions in the UK, Europe, North America, the Middle East, Asia, Africa and Australia. The brand has a range of collections including men’s and women’s clothing, accessories, fragrances and watches.

https://www.retaildive.com/news/reebok-owner-authentic-brands-group-acquires-ted-baker/629774/ Reebok owner Authentic Brands Group closes deal to acquire Ted Baker

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