Ted Baker: What went wrong for the British fashion label?

Ted Baker was founded as a men's clothing brand in Glasgow in 1988.

Ted Baker, a well-known presence on UK city streets since the late 1980s, is the newest victim of the struggles that brick-and-mortar stores are currently facing.

Famous for its unique ads and iconic flower patterns, this brand has always been associated with British style and tradition.

However, in the past few years, the company has encountered significant obstacles including intense competition, the transition to e-commerce, and the resignation of its creator Ray Kelvin.

The last of its stores are scheduled to shut down this week, endangering over 500 jobs in the UK.

"This is a well-known brand with a distinctive design," said Diane Wehrle, a retail expert and CEO of Rendle Intelligence and Insights, in an interview with the BBC.

Throughout the 36 years the brand has been in business, it has had to face competition from other popular high-end fashion brands like Reiss, Whistles, Mango, and Massimo Dutti. These competitors have taken away some of the brand's market share over time.

The business had to deal with competition and high costs, with around 1,000 employees in 46 different locations, including stores, concessions, and online operations.

However, its downfall? Not adapting to changing consumer preferences.

Shoppers Worn Out

"In the past thirty years, their famous floral design, though well-known, had become outdated for today's customers," stated Ms. Wehrle.

Ms. Wehrle stated that the brand's "unstable reputation and negative media coverage" have been worsened by accusations of wrongdoing against its creator, leading to a decrease in sales.

The person who started the company, Ray Kelvin, resigned from his position as top leader in March 2019 following claims of misconduct that he said were not true.

His replacement Lindsay Page and chairman David Bernstein stepped down towards the end of 2019 following the company's profit warning.

Ted Baker originally began as a men's clothing brand in Glasgow back in 1988. Over time, they expanded their presence throughout the United Kingdom and even crossed the Atlantic to open shops in the United States. Additionally, they have secured licensing agreements for stores in various cities across Asia and the Middle East.

Danni Hewson, who leads the financial analysis team at AJ Bell, explained to the BBC that Ted Baker experienced great success in the 1990s and 2000s by developing highly desirable products for important events.

Adolescent males purchased their initial formal outfits for prom, women in their twenties selected unique floral patterns to wear at a friend's wedding, and holiday stockings were filled with designer perfumes and creams, according to her.

But she believes that the appeal of the brand started to diminish as it grew in popularity, and when people realized during lockdown that they could choose to wear athleisure instead of dressing formally, it struggled to differentiate itself.

"Working in retail is tough, especially in the fashion industry," she mentioned.

"What resonates with customers one season may not be as appealing the next, and social media has made staying current even more crucial."

Many other brands have faced similar challenges. While Karen Millen and Coast can still be found within larger online retailers, they no longer enjoy the same level of brand awareness they once did.

Susannah Streeter, who is in charge of money and markets at Hargreaves Lansdown, explained that larger companies such as Next and M&S were successful in pivoting their focus towards creating online platforms and offering more casual clothing lines. In contrast, Ted Baker struggled to adapt and fell behind because they were unable to change their approach.

She mentioned that when Authentic Brands Group acquired Ted Baker in 2022, there were expectations for the brand to make a comeback. However, the necessary funds to reenergize the brand did not come through.

The rise in living expenses has put pressure on customers' wallets, posing a challenge for brands targeting the middle-income segment.

The company that managed Ted Baker's stores in the UK, No Ordinary Designer Label (NODL), went into administration in March of this year.

The American company Authentic Brands Group holds the rights to Ted Baker's brand, while NODL was the parent company for the brand in the United Kingdom.

When NODL fell apart, Authentic explained that the harm caused by partnering with another company was too severe to recover from.

Authentic has been discussing a potential licensing collaboration with various retailers for the brand.

Yet, it is reported that discussions have come to a halt, leaving the fate of the Ted Baker brand uncertain at this time.