Ted Baker owner Authentic cuts ties with AARC

Authentic Brands Group’s strategy of licensing out the operations of the brands it owns may have been a huge success in general, but it can hit obstacles and that’s what seems to have happened regarding Ted Baker, with Authentic ending its relationship with major UK and Europe stores and webstore operator AARC. 

Authentic shared a statement with Fashionnetwork.com and said: “We have terminated Authentic’s relationship with AARC, which, in keeping with our licensing model, owned and operated Ted Baker’s retail stores and e-commerce platform in the UK and Europe.
 
“Despite our efforts to support AARC through recent financial difficulties, including providing the business with a short-term loan, it has consistently failed to inject promised funding into the business and meet its financial obligations to Authentic.

“None of us expected this. We were given assurances and have been disappointed. We’re limited on what we can disclose at this stage, but we can assure all concerned that we are focused on addressing this issue to continue to support the Ted Baker brand.
 
“As an important first step towards protecting the brand and our financial investment, we have used rights under our loan to remove AARC as a shareholder. A new independent board has been brought in to manage operations in its place. The new board will explore all options to ensure the future of the business in consultation with Authentic and other key stakeholders. We will draw on our extensive experience as an owner of 50 brands and with over 1,600 partners to represent our interests.
 
“Ted Baker has strong partners in place around the world and continues to be a powerful brand in the Authentic portfolio. Despite the difficulties facing the UK and European business, we remain committed to Ted Baker and are confident in the brand’s long-term success under Authentic’s stewardship.”

The news comes after Authentic Brands made a loan to Netherlands-based AARC last autumn due to the latter struggling to raise funding. It was said to be working with financial advisors from FTI consulting to arrange long-term funding for its business.

Authentic bought Ted Baker in 2022 for £211 million and outsourced its operations globally to several companies. 

AARC was appointed last spring as the brand’s distribution partner in key markets. But at the point in which it took on the licence, the fashion sector was battling the height of last year’s big challenges such as galloping cost inflation and the cost-of-living crisis. Ongoing issues affecting supply chains and unseasonal weather patterns only added to the problems.