Ted Baker’s British operations will likely have to be liquidated if its rights owner Authentic Brands cannot reach a licensing deal with potential rescuers, administrators warn.
Authentic received two offers, believed to be from Next and Mike Ashley’s Frasers Group, in April to become the new UK operating partner of Ted Baker.
Should it reach a deal with either party, administrator Teneo will move to finalise the sale of No Ordinary Designer Label, which runs Ted Baker’s shops, website and other operations in the UK, to them.
Teneo says any rescue deal for NODL hinges on Authentic granting a new licence to use the Ted Baker brand to whoever takes it on. If that does not happen, the company could end up in liquidation.
In its administrators’ proposals to creditors, Teneo said it had held talks with critical suppliers and key stakeholders, such as landlords, concession partners and merchant service providers like Worldpay, so that NODL can continue to take customer payments and minimise disruption to trading.
However, the talks also covered the implementation of a “liquidation strategy, if a buyer can’t be found”.
Another potential problem for NODL and any rescue is that nine Ted Baker suppliers have lodged claims to take back stock from its distribution centre. Three have already inspected their stock at the warehouse.
Teneo says that so far, none of the claims have been settled and no stock has yet been removed.
NODL crashed into administration in March after promised investment from then owner and Ted Baker licensee AARC failed to appear. The business needed a cash injection after a poor fourth quarter and Authentic, which has owned the Ted Baker brand since August 2022, immediately terminated AARC’s contract and tried, unsuccessfully, to find a new partner in time to prevent its collapse.
According to Teneo, only Secure Trust Bank and HM Revenue & Customs, who are owed £15.6million and approximately £4million respectively, are likely to get back all the money they are owed. NODL’s 612 unsecured creditors are collectively owed £57.5million and are unlikely to get any of it back.
Prior to administration, NODL employed around 929 people in the UK and had 98 stores and concessions. Teneo shut 11 stores, with the loss of 118 jobs, alongside 43 redundancies at its head office.
