Reebok Owner Authentic Brands to Buy British Fashion Label Ted Baker

Authentic Brands has made a name for itself in recent years by buying up downtrodden brands, which it then typically licenses to retail operators. Last year it bought sneaker maker Reebok from

Adidas AG

ADDYY -1.76%

, and in 2020 acquired bankrupt fashion retailer Forever 21 Inc.

Late last year the company, which also owns retailer Eddie Bauer and Sports Illustrated magazine, raised about $3.5 billion by selling stakes to CVC Capital Partners and HPS Investment Partners in a deal that valued the company at $12.7 billion.

For Ted Baker, the sale to Authentic Brands for £211 million ends months of uncertainty about the 35-year-old retailer’s future. The London-listed company said in April it was seeking a buyer and previously rebuffed approaches from Sycamore Partners, the U.S. private-equity firm. It had earlier identified Authentic Brands as its preferred bidder, only for the U.S. company to rule itself out of any acquisition in June after the two sides failed to agree on a valuation.

Those differences have seemingly now been ironed out, with Ted Baker saying in a statement Tuesday that the 110-pence-a-share offer—an 18% premium to its closing price Monday—was “fair and reasonable,” and that its directors were unanimously recommending that shareholders vote in favor of the sale.

Once viewed as a British retail pioneer, Ted Baker has fallen out of fashion in recent years as it struggled to engage with younger consumers. At a time when cheap fast-fashion labels and expensive luxury brands have both been thriving, Ted Baker’s midprice offering has lost its appeal to some buyers, analysts said.

While the company reduced losses in the year to Jan. 29 to £44.1 million, compared with £107.7 million in the previous financial year which was disrupted by the Covid-19 pandemic, its share price has hovered around the £1 mark for the past two years. That compares with its peak at over £27 seven years ago.

Boardroom turmoil has contributed to the brand’s difficulties.

Ray Kelvin,

Ted Baker’s founder, quit the company in 2019 amid employee allegations of inappropriate behavior. Mr. Kelvin denied all allegations and said at the time he had decided to step down to allow the company to move on.

Mr. Kelvin, who grew Ted Baker from a single store in Glasgow in the late 1980s to a global fashion brand, retains an 11.5% stake in the company. Its largest shareholder is currently U.K. private investment firm Toscafund Ltd. Both Mr. Kelvin and Toscafund have said they would accept Authentic Brands’ offer.

Write to Trefor Moss at [email protected]

Authentic Brands has made a name for itself in recent years by buying up downtrodden brands, which it then typically licenses to retail operators. Last year it bought sneaker maker Reebok from

Adidas AG

ADDYY -1.76%

, and in 2020 acquired bankrupt fashion retailer Forever 21 Inc.

Late last year the company, which also owns retailer Eddie Bauer and Sports Illustrated magazine, raised about $3.5 billion by selling stakes to CVC Capital Partners and HPS Investment Partners in a deal that valued the company at $12.7 billion.

For Ted Baker, the sale to Authentic Brands for £211 million ends months of uncertainty about the 35-year-old retailer’s future. The London-listed company said in April it was seeking a buyer and previously rebuffed approaches from Sycamore Partners, the U.S. private-equity firm. It had earlier identified Authentic Brands as its preferred bidder, only for the U.S. company to rule itself out of any acquisition in June after the two sides failed to agree on a valuation.

Those differences have seemingly now been ironed out, with Ted Baker saying in a statement Tuesday that the 110-pence-a-share offer—an 18% premium to its closing price Monday—was “fair and reasonable,” and that its directors were unanimously recommending that shareholders vote in favor of the sale.

Once viewed as a British retail pioneer, Ted Baker has fallen out of fashion in recent years as it struggled to engage with younger consumers. At a time when cheap fast-fashion labels and expensive luxury brands have both been thriving, Ted Baker’s midprice offering has lost its appeal to some buyers, analysts said.

While the company reduced losses in the year to Jan. 29 to £44.1 million, compared with £107.7 million in the previous financial year which was disrupted by the Covid-19 pandemic, its share price has hovered around the £1 mark for the past two years. That compares with its peak at over £27 seven years ago.

Boardroom turmoil has contributed to the brand’s difficulties.

Ray Kelvin,

Ted Baker’s founder, quit the company in 2019 amid employee allegations of inappropriate behavior. Mr. Kelvin denied all allegations and said at the time he had decided to step down to allow the company to move on.

Mr. Kelvin, who grew Ted Baker from a single store in Glasgow in the late 1980s to a global fashion brand, retains an 11.5% stake in the company. Its largest shareholder is currently U.K. private investment firm Toscafund Ltd. Both Mr. Kelvin and Toscafund have said they would accept Authentic Brands’ offer.

Write to Trefor Moss at [email protected]