Ted Baker owner Authentic Brands is exploring significant store closures and job losses at the brand as it terminates its relationship with the firm that runs its UK operation.
The Telegraph reports that Authentic Brands, which bought the ailing fashion retailer for £211m two years ago, is close to appointing restructuring experts as it seeks to reduce Ted Baker’s rent bill.
It said that Teneo are favourites to be hired following a beauty parade that also included Begbies Traynor.
One of the measures that Authentic is expected to explore is a Company Voluntary Arrangement (CVA), which will enable it to reduce rents or exit stores, if approved by a majority of landlords and other creditors.
It comes as Authentic Brands has terminated its relationship with AARC, the Dutch firm that it hired to run Ted Baker’s stores and ecommerce operations in the UK and Europe.
Authentic has provided AARC with a short-term loan back in October to provide stable footing amid financial struggles at the firm.
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However, the brand owner said it had ended its relationship as AARC had “consistently failed to inject promised funding into the business and meet its financial obligations to Authentic”.
An Authentic spokesperson said: “None of us expected this. We were given assurances and have been disappointed. We’re limited on what we can disclose at this stage, but we can assure all concerned that we are focused on addressing this issue to continue to support the Ted Baker brand.”
Authentic has used its right under the loan to remove AARC as a shareholder, which it said was a first step towards “protecting the brand and our financial investment”.
It has appointed a new independent board to manage Ted Baker’s operations.
The spokesperson said: “The new board will explore all options to ensure the future of the business in consultation with Authentic and other key stakeholders. We will draw on our extensive experience as an owner of 50 brands and with over 1600 partners to represent our interests.
“Ted Baker has strong partners in place around the world and continues to be a powerful brand in the Authentic portfolio. Despite the difficulties facing the UK and European business, we remain committed to Ted Baker and are confident in the brand’s long-term success under Authentic’s stewardship.”
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