[ad_1]
Authentic Brands Group LLC said it has agreed to buy Ted Baker Teddy. 17.08%
PLC for $254 million, adding the struggling British fashion label to brands that include Brooks Brothers and Reebok.
The New York-based company said Tuesday that “there are significant growth opportunities for the Ted Baker brand, particularly in North America,” and that taking the business private would allow for a restructuring that would “maximize future potential.”
Authentic Brands has made a name for itself in recent years by buying up failed brands, which it typically licenses to retail operators. Last year, the sneaker maker bought Reebok from Adidas AG
ADI -1.76%
And in 2020, bankrupt fashion retailer Forever 21 Inc.
Late last year, the firm, which owns Eddie Bauer and the Sports Illustrated magazine retailer, sold a stake to CVC Capital Partners and HPS Investment Partners in a $12.7 billion deal that raised about $3.5 billion.
For Ted Baker, the £211 million sale to Authentic Brands ends months of uncertainty over the future of the 35-year-old retailer. The London-listed company said in April it was looking for a buyer and had previously rejected approaches from US private equity firm Sycamore Partners. It had previously floated Authentic Brands as its preferred bidder, and the US company could withdraw from any takeover in June after the two sides failed to agree on a valuation.
Those differences now appear to have been erased, with Ted Baker saying in a statement on Tuesday that the 110-pence-a-share offer – an 18% premium to Monday’s closing price – was “fair and reasonable” and that directors unanimously recommended that shareholders support the sale.
Once seen as a British retail pioneer, Ted Baker has fallen out of fashion in recent years as it struggles to engage with younger shoppers. At a time when cheap fast-fashion labels and expensive luxury brands are both thriving, Ted Baker’s mid-price offerings have lost appeal to some buyers, analysts said.
The company narrowed its losses for the year to January 29 to £44.1m, compared with £107.7m in the previous financial year, which was disrupted by the Covid-19 pandemic, and has since moved its share price to around £1. two years. That compares to a peak of over £27 seven years ago.
Boardroom turmoil contributed to the brand’s woes. Ted Baker founder Ray Kelvin left the company in 2019 amid allegations of employee misconduct. Mr. Kelvin denied all allegations and said at the time that he had decided to step down to allow the company to move forward.
Mr Kelvin, who grew Ted Baker from a single store in Glasgow into a global fashion brand in the late 1980s, owns 11.5% of the company. The largest shareholder is currently UK private investment company ToskaFund Limited. Both Mr. Kelvin and Toscafund said they would accept offers from genuine brands.
Write Trefor Moss at Trefor.Moss@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8
[ad_2]
Source link
