Authentic terminates partnership with AARC, owner of Ted Baker

Authentic Brands Group, owner of Ted Baker, has ceased its association with major UK and European stores and online store operator AARC amidst several challenges. The company's approach of licensing operations of its brands generally works well, but they have encountered an obstacle with Ted Baker. A statement by the company stated that they have ended their engagement with AARC, who previously owned and managed Ted Baker's retail stores and e-commerce platform in the UK and Europe.

Authentic had been trying to support AARC amidst financial issues, including the provision of a short-term loan. Despite this, AARC continually failed to introduce the promised funding into the business and never met its financial agreements with Authentic. Authentic had hoped for a better outcome, however, they are now focusing on remedying this situation to support the Ted Baker brand.

The initial action taken by Authentic to safeguard the brand was to exercise their loan rights to eliminate AARC as a shareholder. Subsequently, a new independent board has been established to oversee operations. This newly formed board would explore all possibilities for the business's future in collaboration with Authentic and other key contributors.

Despite these recent complications, Authentic reassures that Ted Baker still maintains strong partnerships globally and the brand still holds strong in the Authentic portfolio. They remain committed to the Ted Baker brand and are positive that the brand will have long-term success under Authentic's management.

Last autumn, Authentic extended a loan to Netherlands-based AARC, which was struggling to secure funding. At the time, AARC was reportedly appointing financial advisors from FTI consulting to strategize long-term funding for the business.

In 2022, Authentic bought Ted Baker for £211 million and outsourced its global operations to multiple companies, including AARC. The announcement comes in light of AARC's failure to meet its financial obligations, escalating cost inflation, cost-of-living crisis, supply chain disruptions, and unpredictable weather patterns which have further aggravated conditions in the fashion industry.