Iconic British fashion chain with 86 stores considering 'wave of closures'
An iconic British fashion chain with 86 stores is considering a 'wave of closures' amid an ongoing battle on the high street.
Authentic Brands Group (ABG), owner of Ted Baker, is exploring various cost-cutting measures to support the company's 'rising' costs.
It comes just two years after ABG rescued the high street brand as part of a £211m deal after mounting losses.
Founded by retail turnaround specialist and Canadian billionaire Jamie Salter, ABG owns nearly 40 fashion, sportswear and celebrity brands, including Reebok.
The group is said to be now appointing experts to oversee a restructuring as the company looks to significantly reduce the punishing rent bill for dozens of British Ted Baker stores, the group said. The Telegraph.
Consultants at Teneo are believed to be favorites to lead the negotiations.
A city source said this The Telegraph Saturday: “Ted Baker is one of the few major high street retailers that has not yet adjusted rents to current market rates. It is massively over-let.”
One of the cost-saving measures that ABG is expected to look at extensively is a Voluntary Business Agreement (CVA).
A CVA does not mean that a company has gone bankrupt.
Instead, cash-strapped companies may look for ways to save the business, such as lowering rents from landlords.
Companies often agree to a CVA to avoid insolvency, which can lead to closures or the entire company going bankrupt.
ABG and Ted Baker have been contacted for comment.
It's not the only brand considering various cost-saving options.
Last week it was reported that struggling fashion brand Superdry is considering a major restructuring, including store closures and job cuts.
Sky News reported last month that Superdry is working with PwC advisers on a plan that could lead to a CVA (voluntary company arrangement) or other form of restructuring.
But it was reported on Friday that Superdry CEO Julian Dunkerton is also in talks with Rcapital and Gordon Brothers over a bid to take the controversial British fashion retailer private.
Last year Wilko considered entering into a CVA, after which the company closed all 400 stores after going into administration.
In 2019, card shop Clintons reported it was considering a CVA, after which it told landlords they urgently needed to close 66 stores.
Mothercare carried out its first CVA in 2018, which resulted in a plan to close 55 stores, putting 900 jobs at risk.
Shoe store Office also considered closing a CVA in the midst of the battle.
In 2020, coffee chain Caffe Nero launched a CVA to restructure its operations and avoid store closures and job losses.
Retailers have been feeling the pressure since the pandemic, as shoppers cut back on spending due to the rising cost of living.
High energy costs and the move to online shopping after the pandemic are also taking their toll, with many high street stores struggling to continue.
The high street has seen a slew of closures in the past year and more are in the pipeline.
Several major brands have also collapsed, such as Wilko and Paperchase.
Many retailers are struggling to make ends meet, especially during the Covid-19 pandemic.
Energy costs have risen and more consumers than ever are choosing to order online instead of going to the store.
This leaves some retailers struggling with budgets and having no choice but to close stores to cut costs.
British retailers saw the amount of goods sold fall last month, at the fastest pace in three years, as under-pressure households moved some of their Christmas shopping to earlier this year.
Sales volumes fell 3.2% in December, Office for National Statistics data showed, compared with a 1.4% increase a month earlier.
Several major chains are pulling down the shutters for the last time this month.
Lidl will pull down the shutters on its site in Thornaby next month.
The bargain retailer has confirmed that its Stockton-on-Tees locations will close on February 29.
Boots revealed it would close 300 stores over the next year as part of plans to develop its brand.