“We wish that there could have been a better outcome for the Ted Baker employees and stakeholders,” said McNamara.
“We remain focused on securing a new partner to uphold and grow the Ted Baker brand in the UK and Europe where it began.”
He added that it will “hopefully [be] some consolation for customers” that Ted Baker “will continue to trade online and in stores” and existing orders will be fulfilled.
Why has Ted Baker gone into administration?
No Ordinary Design Label (NODL) – the holding company that manages Ted Baker’s British and European stores – reported a pre-tax loss of £43m in the year to January 2022, according to the last accounts filed at Companies House. This is despite sales of nearly £320m.
McNamara blamed this haemorrhage on AARC, the Dutch firm responsible for operating NODL’s UK and Europe retail stores and online ecommerce business.
“The damage done during a period under AARC in which NODL built up a significant level of arrears was too much to overcome,” he said.
But the decline cannot solely be attributed to a finance issue.
Ted Baker has had a difficult few years. During 2019, the company issued four profit warnings – and was forced to admit that it had overstated the value of clothing in its inventory by as much as £25m.
In the same year, founder Ray Kelvin – who denies wrongdoing – was forced to step down following accusations of inappropriate workplace behaviour.
“It became a scandal that tarnished the brand’s image,” said Stephanie Lennox, a finance expert at Startups.
Lennox also blamed the decline of officewear in an era of work-from-home.
“The pandemic-induced shift to remote working has rendered the traditional office uniform – crisp suits, pencil skirts, and even pricey floral patterned shirts – largely obsolete,” she said.
A Retail Week report found that office wear sales have dropped by 67% since the onset of the pandemic.
However, Ted Baker is not the only high street brand that is struggling.
Inflation, reduced consumer spending and rising costs have hit retailers hard. Some 11 have failed already this year, forcing the closure of 260 stores and the loss of 10,516 jobs. The Body Shop UK was one high profile casualty.
Spending during the pre-Christmas quarter – known as the “golden quarter” for its normal bumper spend – was much quieter than expected, leaving brands with little wiggle room in the leaner months.
Ted Baker collapsed due to a confluence of internal issues and market conditions. But whatever the ultimate cause of its decline, its loss will be mourned by many who used to frequent the brand – including money saving guru Martin Lewis.
“Very sad to hear Ted Baker going into administration. I used to get quite a lot of my on-air jackets from there, and in the early days it was at the cutting edge of marketing,” he said.
“Though in truth I stopped in the last few years as I felt it’d lost its way a bit in the offering – sadly looks like I wasn’t the only way to feel that. My thoughts with the staff – I hope their jobs will be secured.”
