Authentic said in a statement over the weekend that AARC had not met its financial obligations, and had failed to invest in the Ted Baker business.
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Last April, Authentic signed a partnership deal with AARC to operate Ted Baker’s 120-plus retail stores and concessions, and the brand’s online business, as reported. The partnership took effect in June.
AARC is a retail operator in 11 countries across Europe, the Middle East and Africa. It describes itself as “a leading group that operates fashion and beauty stores across Europe, and a true pan-European omnichannel retail specialist.”
The deal with AARC was part of a wider licensing model that Authentic built for Ted Baker, similar to what it did for Reebok.
In April Authentic also partnered with PDS, a design-led fashion sourcing and manufacturing platform, which it described as a “core licensee and operating partner” for Ted Baker in Europe.
Authentic said on Saturday that despite its best efforts to support AARC through recent financial difficulties, including providing the business with a short-term loan, AARC “has consistently failed to inject promised funding into the business and meet its financial obligations to Authentic.”
Authentic added: “None of us expected this. We were given assurances and have been disappointed. We’re limited on what we can disclose at this stage, but we can assure all concerned that we are focused on addressing this issue to continue to support the Ted Baker brand.”
The brand management giant said it has removed AARC as a shareholder in the Ted Baker business and brought in a new, independent board to manage operations in AARC’s place. The Ted Baker stores will remain open.
“The new board will explore all options to ensure the future of the business in consultation with Authentic and other key stakeholders. We will draw on our extensive experience as an owner of 50 brands, and with more than 1,600 partners, to represent our interests,” Authentic said.
It added that despite the difficulties facing U.K. and European business, it remains committed to Ted Baker “and are confident in the brand’s long-term success under Authentic’s stewardship.”
WWD has reached out to AARC for comment.
This isn’t the first time that Authentic has witnessed a brand partnership sour.
Earlier this year, it terminated a licensing deal with Arena Group, which publishes Sports Illustrated. Authentic, which owns the Sports Illustrated brand, said Arena had failed to make a quarterly license fee payment of $3.7 million late last year.
Arena had published SI under license from Authentic since 2019 as part of a 10-year contract. The termination of the license resulted in widespread layoffs at SI last month.
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