The retail conglomerate Authentic Brands Group, which owns brands including Reebok, Forever 21, and Juicy Couture, has signed a deal to buy UK fashion chain Ted Baker for US$ 254 million.
The deal price represents a premium of approximately 18% to Ted Baker’s closing price on Monday. The company is listed on the London Stock Exchange. Ted Baker said its board would unanimously recommend that shareholders vote for the deal.
Upon completion, ABG stated that it intends to separate the Ted Baker business into an intellectual property holding company that will remain controlled by ABG, as well as one or more operating companies that operate the brand’s stores, e-commerce operations, and wholesale.
Authentic Brands Group also stated that it will explore options to transfer full or partial ownership and control of some or all of the separate operating companies to other partners.
Tuesday’s announcement resolves months of speculation about the future of the British fashion moniker, which was forced to go on sale earlier this year amid pandemic-related difficulties.
Ted Baker rejected several bids from private-equity chain Sycamore Partners before starting its sale process. ABG had at one time negotiated a deal with Ted Baker before he left.
ABG CEO and founder Jamie Salter said in a statement released Tuesday that the Ted Baker brand is “highly regarded” by consumers globally. He further added in his statement, “We are excited to build on the brand’s global foundation through a business model focused on licensing, wholesale, retail, digital and strategic marketing partnerships”.
Ted Baker is also in the midst of turnaround plans of his own and expects to benefit from the continued strength of luxury spending, even as inflation persists and consumers pull back their spending on other non-discretionary items. Strength in luxury retail has spurred more M&A activity in the sector, while British companies have become more affordable to overseas buyers due to the pound’s weakness.