The British trendy brand Ted Baker, which has been acquired, has gone bankrupt again.

The British fashion chain brand Ted Baker will enter bankruptcy management, and potential buyers have discussed cooperation matters with the group to which Ted Baker belongs, Authentic Brands Group (ABG).

Recently, according to reports from several overseas media, Ted Baker has entered the bankruptcy process, putting 975 employees in the UK and on the continent of Europe at risk of being laid off. This British brand has been operating poorly in recent years. In 2022, the American group ABG, which owns Reebok, David Beckham and other brands, acquired Ted Baker for 2.11 pounds (about 1.9 billion yuan).

The main reason for this implementation of management is that Ted Baker's holding companies in the UK and Europe - No Ordinary Designer Label (NODL) - "accumulated a large amount of arrears" during its cooperation with the Dutch AARC company, and the damage caused "is too great".

John McNamara, ABG's chief strategy officer, said they hoped to provide better solutions for Ted Baker employees and shareholders. Currently, the shopping experience of customers is not affected, and NODL will continue to operate the online shopping system and offline stores.

Ted Baker is one of the national brands in the UK, positioned as light luxury. It has independent stores in major shopping districts in London such as Oxford Street and Covent Garden, and has also entered famous department stores such as Harrods and Selfridges. Many girls may have bought Ted Baker's printed dresses. The whole brand line focuses on elegance, but in recent years, some of the designs will indeed make people feel too old-fashioned.

Ted Baker started as a men's wear brand in Glasgow, UK, in 1988. It has not only expanded its chain stores to the European continent and the United States, but also entered the Asian and Middle Eastern markets in recent years. It has more than 500 stores and counters worldwide.

The further expansion of Ted Baker in China can be traced back to 2019, when Ted Baker and Shanghai Longshang Trading Co., Ltd. established a joint venture to develop the brand in the Chinese mainland, Hong Kong and Macau. The new joint venture became the exclusive distributor of Ted Baker in Greater China, responsible for the stores, franchise stores and online sales channels in these key markets, and supported the expansion of the brand in the second and third-tier cities in the Chinese mainland. In fact, Ted Baker's move is also to take a fancy to the ability of the joint venture in digital marketing and e-commerce operations, and try to break through the brand's bottleneck in the Asian market.

Also in 2019, Ted Baker's founder, Ray Kelvin, was accused by employees of having inappropriate behavior suspected of sexual harassment in the company, including forced hugging and kissing the ears. Although he denied these accusations, he still chose to leave voluntarily, resigning as CEO and director. Ray Kelvin owns 35% of Ted Baker's shares, which were worth more than 300 million pounds at the time.

Rachel Osborne, the new CEO who took office in 2020, wanted to lead the brand's transformation, but unfortunately encountered the epidemic. The core market of the brand, which was previously positioned as suits and social occasion dresses, was hit hard.

Ted Baker's market value plunged 35% in 2021, and the brand had a pre-tax loss of 38.4 million pounds in that fiscal year. Therefore, in April 2022, Ted Baker officially launched the sale process, and ABG eventually acquired Ted Baker at a low price of 211 million pounds and privatized it. According to ABG, privatization is conducive to business restructuring. They plan to use their industry experience in fashion brands, global operating networks, and leading brand management capabilities to increase Ted Baker's revenue and profitability globally, just like the transformation they have carried out after acquiring brands such as Reebok, Brooks Brothers, and Nautica.

However, obviously, ABG's strategy for Ted Baker has not worked. After the acquisition was completed, ABG's first priority was to reduce costs and increase efficiency, and outsourced both offline and online businesses of Ted Baker to the Dutch retail business management company AARC, which will lead the brand's procurement and production. As the outsourcing model gradually took effect, ABG cut 200 jobs at Ted Baker's UK headquarters.

It is this move that led ABG to issue a statement today stating that "a large amount of arrears" had accumulated during its cooperation with AARC, and the damage caused was too great to bear. From this, it can be seen that the method of saving costs through outsourcing has not worked, but instead led to the departure of the core personnel of the brand and damaged the original tonality of the brand.