Ted Baker: What went wrong for the fashion label?

Ted Baker, a prominent fashion label, began its journey in Glasgow in 1988, initially focusing on menswear. Over the years, it became a staple on UK High Streets, known for its quirky advertising and distinctive floral prints. However, the brand is now facing significant challenges that have put over 500 jobs at risk in the UK. Diane Wehrle, a retail expert, emphasized that Ted Baker is an iconic brand with a unique design. Yet, it has struggled to compete with other high-end fashion retailers like Reiss, Whistles, Mango, and Massimo Dutti, which have gradually taken away its market share. With around 1,000 employees across 46 stores and an online presence, the brand has been burdened by high operational costs. One of the critical issues has been its failure to adapt to changing consumer preferences. Wehrle pointed out that while the floral designs were once a hallmark of the brand, they have become outdated for modern shoppers. Additionally, the brand's instability and negative media coverage, particularly surrounding allegations against its founder Ray Kelvin, have further impacted sales. Kelvin stepped down as CEO in March 2019 after facing accusations of inappropriate behavior, which he denied. Following his departure, his successor Lindsay Page and chairman David Bernstein resigned in late 2019 after the company issued a profit warning. Ted Baker's expansion was notable, with stores established across the UK and the US, as well as licensing agreements in Asia and the Middle East. Danni Hewson, head of financial analysis at AJ Bell, noted that Ted Baker enjoyed tremendous success in the 1990s and 2000s by creating desirable products for special occasions. Young men often purchased their first suits for prom, while women chose the brand's floral designs for weddings. However, as the brand expanded, its appeal began to wane. The COVID-19 pandemic led consumers to realize they preferred comfortable athleisure wear over formal attire, making it difficult for Ted Baker to maintain its relevance. The fashion retail industry is notoriously competitive, with trends changing rapidly. What resonates with shoppers one season may fall flat the next, and social media has heightened the importance of staying 'on trend. ' Other brands have faced similar struggles, with names like Karen Millen and Coast still existing but lacking the recognition they once had. Susannah Streeter, head of money and markets at Hargreaves Lansdown, pointed out that larger retailers like Next and M&S successfully pivoted to establish digital channels and more relaxed product ranges. In contrast, Ted Baker struggled to adapt. When Authentic Brands Group acquired Ted Baker in 2022, there were high hopes for a revival, but the necessary investment to rejuvenate the brand did not materialize. The ongoing cost-of-living crisis has also squeezed consumers' budgets, posing an additional challenge for brands positioned in the middle market. The company that operated Ted Baker's UK stores, No Ordinary Designer Label (NODL), entered administration in March this year. Authentic Brands Group now owns the intellectual property for Ted Baker, while NODL was the holding company for the brand in the UK. Following NODL's collapse, Authentic stated that the damage incurred during a partnership with another firm was insurmountable. Authentic has been in discussions with other retailers regarding a potential licensing partnership for the brand, but reports suggest these talks have stalled. As a result, the future of the Ted Baker brand remains uncertain.