Ted Baker sale: Will new owner Authentic Brands Group be a 'good custodian'?

Foreign ownership of a domestic brand invariably comes with mixed sentiment, even if the sale of that brand means it will have a better parent.

Back in April Ted Baker put itself up for sale after rejecting several bids, including from the group that owns Kurt Geiger and Nine West.

Trading suffered after Ted Baker’s ‘forced hugs’ scandal, which saw founder Ray Kelvin leave the company in 2019 as well as its share price tanking.

Founded in Glasgow in 1988, Kelvin built a global lifestyle business that operates over 500 stores. Under the new ownership of Authentic Brands Group (ABG), the American conglomerate will want to breathe new life into the brand, but not everyone is convinced.

Justin Biddle, UK Lead at Shopware, said: “ABG's acquisition of Ted Baker is unlikely to give this ailing British retailer a fresh start. While ABG has freed the brand from its supply chain issues, the future success of this brand, in comparison to its former glory days, remains very uncertain.”

“Ted Baker still has some gravitas with shoppers as a brand, and ABG clearly has confidence it can continue to attract demand from consumers. However, the most we can expect to happen is that it'll be licensed to a franchisee, and this'll be the main way its new owners reap the benefits once it takes the helm.”

Back in 2019 Ted Baker suffered an inventory and balance sheet issue, which saw it overstate its goods on hand and reducing its financial outlook. Deloitte was called in to consult on the company’s debt and restructuring as well as advise on a multitude of complex issues.

At its core, Ted Baker is a listed high street retailer that has grown into a lifestyle brand with a distinct and quirky style. ABG said it would be a 'good custodian' of the Ted Baker business, but only time will tell.