British fashion chain Ted Baker in administration, NZ store closed
One of the first international upmarket retail chains to set up a shop in New Zealand has exited the market and is embarking on a rapid downsizing operation after a global operator fell into administration.
High street fashion chain Ted Baker operated a retail store in Britomart in the Auckland CBD for more than 13 years, and closed its shop late last year.
The British brand, which has been hailed as a pioneer in experiential retail, has been grappling with declining sales and found itself in an unfortunate position in recent years being an upmarket yet not quite luxury clothing retailer amid a cost of living crisis and a consumer base that was increasingly moving away from formal wear.
International media reports the Ted Baker brand had also struggled following fallout from the 2019 ousting of its founder Ray Kelvin amid claims of a culture of “forced hugs” at the company.
Ted Baker’s European retail and online arm appointed Teneo as administrators last month, and vowed to shut down 15 loss-making stores across the UK, including flagship locations in London Bridge, Oxford, Bristol and Liverpool. Hundreds of jobs are set to go.
The administrator said the closure of the stores would “improve the performance of the business”.
Authentic Brands, the owner of the intellectual property of Ted Baker, is continuing to seek a new operating partner for the retail and online business in the UK and Europe.
Ted Baker had 46 stores in Britain and through Europe at the time it was placed into administration.
Retail commentator Chris Wilkinson said Ted Baker found itself in financial strife, like a growing list of big names retailers, due to the wider slowdown in the retail market and falling consumer spending.
“Ted Baker product is smart, there’s a degree of formality to it even though some consider it quirky. Certainly through Covid, consumers weren’t buying those types of products at all, so for quite a while their main customer base was completely arrested,” said Wilkinson.
He said he believed the administration would likely see the brand loved by the likes of the Princess of Wales change hands and it could continue predominantly as a wholesale brand, stocked in the likes of department stores, including Smith & Caughey’s and Ballantynes in New Zealand.
Ted Baker’s stores had always been important for marketing means but were not necessarily the biggest driver of sales, which typically came from its wholesale business, Wilkinson said.
Ted Baker was on of the first international retailers to expand into the Auckland city centre, well ahead of the curve before a string of luxury brands opened up glitzy flagship stores and downtown Auckland became a luxury fashion destination.
At one point it had grown quite a substantial local following.
“It’s always disappointing to see a great brand close. Ted Baker has been operating in the city centre since 2011, but sadly we understand the UK brand has gone into administration globally,” said Viv Beck, chief executive of Heart of the City.
“We have been advised that there has been strong interest in the site they occupied.”
Wilkinson said Ted Baker was the forerunner to the international retail expansion and development of New Zealand stores that had picked up at pace in recent years.
He said he believed that would continue, even if more Ted Baker stores – or all of its retail stores – closed down.
Retail woes
Squeezed household budgets have dented retailers earnings as consumers remain restricted at how much they can spend at shops. Most retailers are finding it hard to turn a profit.
Ted Baker is the latest in a growing list of local and global established retailers that have found themselves in trouble amid declining sales post-pandemic.
Ethical cosmetics retailer The Body Shop faces an uncertain future and has been embarking on downsizing its own retail operation, and on Wednesday local New Zealand fashion powerhouse Kate Sylvester announced she would be closing her label after 31 years in business.
Sylvester said the final collection from the Kate Sylvester label would be released later this year, and its six New Zealand stores – three in Auckland, one in Wellington and two in Christchurch – will close.
Data from Centrix shows liquidations for the retail sector are up 57% from where they were this time last year.
The latest numbers from Stats NZ shows electronic retail spending fell 1.8% in February month on month but was up 2.5% when compared with a year earlier. There were spending declines across almost all retail categories.
Insights from the latest Retail NZ Retail Radar report shows inflationary pressures continue to affect the sector, with 41% of retailers saying they have had to push up their prices.