Authentic Brands, the US owner of Ted Baker, is taking action to prevent a cash crunch at the fashion retailer, providing a short-term loan to the company it hired to manage the brand in the UK and Europe, the Times revealed.
Purchasing Ted Baker for £211 million last year, Authentic Brands held onto its brand and intellectual property while outsourcing operations to various firms.
In April, the Reebok and Forever 21 owner appointed AARC, a small Dutch company, to manage Ted Baker’s UK and European operations; however, the group has struggled to secure long-term financing.
To stabilise Ted Baker, Authentic provided a short-term loan to AARC, but City analysts reckon the fashion company still needs to seek financing from alternative lenders, likely at high interest rates.
Ted Baker has experienced several headwinds, including lower clothing sales due to warm weather in September and October, but despite this, the company's sales have risen by 7% this year.
Authentic Brands was created by Canadian billionaire Jamie Salter and has developed over recent years into a US$20 billion brand management super-firm, owning well-known names like Juicy Couture, Quicksilver, Hunter and Nautica.
Also purchasing the brand rights to celebrities, Authentic Brands manages the estates of Shaquille O’Neil, David Beckham, Mohamed Ali, Marilyn Monroe and Elvis.