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Authentic Brands, the owner of Ted Baker, is reportedly considering a number of cost saving options after terminating its relationship with AARC, the firm that runs its UK operation.
According to The Telegraph, Authentic Brands is close to appointing restructuring experts to implement measures which could include store closures, job cuts or even a Company Voluntary Agreement (CVA).
Any potential CVA would allow Authentic to reduce rent rates or exit stores entirely as it looks to reduce Ted Baker’s rent bill.
However, for this to happen the majority of the company’s landlords and other creditors must agree.
Authentic also confirmed it had terminated its relationship with AARC as it had “consistently failed to inject promised funding into the business and meet its financial obligations to Authentic”.
Authentic provided the Dutch firm with a short-term loan in October last year in an attempt to help stabilise the company which was struggling financially.
In a statement to Retail Sector, Authentic 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.”
The company added: “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.
“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 1600 partners to represent our interests.”
Authentic declined to comment on the reports around Ted Baker’s cost saving measures.
