Ted Baker is facing the heat as credit insurers reportedly pulled their cover on the fashion retailer’s suppliers during the pandemic.
According to The Sunday Times, the British brand has been trading without credit insurance since 2020, when big insurers such as Euler Hermes and Atradius cut ties with the apparel firm.
The publication said it has placed Ted Baker under cashflow pressure as it was left with just 3.1 million pounds in net cash in January after it garnered more stock in anticipation of a post-Covid recovery.
Without the insurance cover, it is likely that suppliers will seek tighter payment terms, causing a strain on cashflow.
The report comes amid the company’s lengthy sale process, which it initiated in April following an unprovoked takeover offer from Sycamore Partners.
Since its launch, the sale has been said to have attracted a number of interested bidders but was thrown into doubt after Ted Baker’s preferred bidder, reported by Sky News to be Authentic Brands Group, backed out of sale discussions.