Ted Baker shares hit as suitor pulls bid for retail chain

Shares in the London-listed fashion chain fell by more than 15% after preferred bidder decided not to make an offer

Ted Baker said the preferred bidder had indicated its reason for not proceeding was not related to its due diligence review.

Shares in Ted Baker tumbled by more than 15% after the company said its first-choice suitor had decided not to make an offer, forcing the fashion chain to consider other options.

The preferred bidder – reported to be Juicy Couture and Forever 21-owner Authentic Brands – had indicated its decision was not because of its due diligence review, Ted Baker said.

The London-listed chain had put itself up for sale in April and in late May picked its preferred suitor to take the process forward after a flurry of revised proposals as private-equity group Sycamore pulled out. 

"With record-low UK consumer confidence, the cost of living crisis, the possibility of a recession, and shaky equity markets, it is understandable that Ted Baker is desperate for a buyer," said Victoria Scholar, head of investment at the interactive investor online platform.

Known for its suits, shirts, and dresses, Ted Baker is in the midst of a turnaround plan and in May pointed to robust sales in the coming months as demand for office and leisure wear rebounds. 

A Sky News report last month said Authentic Brands was willing to offer more than 150 pence per Ted Baker share. Sycamore had proposed a deal in March at 137.5 pence per share, or more than £250m, but Ted Baker rejected its repeated overtures. 

The private-equity firm later participated in the initial stage of Ted Baker's sale process before walking away and it is unclear whether it would rejoin the bidding.

Its shares sank 15% to 116 pence, valuing it at £225.5m. 

The company's market value has crumbled in the past few years after the departure of former CEO Ray Kelvin in 2019 amid misconduct allegations and after the group disclosed an accounting scandal in 2020.

Mr Kelvin has denied the allegations and still owns nearly 12% of the company he founded in Glasgow, Scotland, in 1988 as a single-store shirt specialist. 

• Reuters