Ted Baker

In early 2024, Ted Baker appointed administrators in the UK. The rest of this content pre-dates the event.  

Strengths

Brand – Ted Baker has created, and closely safeguarded, a unique image. It sees itself as a brand rather than a retailer and has been aiming to become “a global lifestyle brand”.  

Measured expansion – Ted Baker has generally taken a measured approach to expansion. 

Store individuality – Until recently Ted Baker eschewed traditional advertising routes and has invested substantially in its store network as they play a crucial role in reinforcing the brand. Stores play a significant role in attracting customers and promoting the brand, for instance through engaging and sometimes interactive window displays or in-store events. This approach supports Ted Baker’s reputation as being quirky and quintessentially British. Each store is unique and designed to fit the space it sits in. 

Secret Sales tie up – Ted Baker teamed up with Secret Sales to create a non-full-price, long-term strategy in 2021. Using the Secret Sales ecommerce marketplace Ted Baker built an ‘always on’ UK digital outlet allowing it to sell aged stock somewhere other than on the core Ted Baker website. Ted Baker can keep total control of its own brand on the marketplace and has digitally connected its inventory systems and supply chain to the platform so that it can trade in real time and does not need to physically transport stock to a third-party seller. 

Male grooming business – Ted’s Grooming Room format continues to operate across London. This format offers haircuts, shaves and other treatments. The microsite tedsgroomingroom.com supports its male grooming offer through sales of products and running the treatment booking programme for the salons.  

Embracing artificial intelligence (AI) – To improve the customer service experience Ted Baker has turned to AI. For example, it previously partnered with marketing agency Puzzle to launch the Seemore chatbot for Facebook, it teamed up with Retail Assist to enhance in-store customer service capabilities and has trialled AI technology that allowed online customers to chat with in-store stylists. 

Weaknesses 

Licensed stores – A rapidly increasing number of stores in Asia and the Middle East are operated under licence, which means that the company has given up a certain amount of control over the brand. 

Operational control – The retailer has identified its operations as an area for improvement, looking to assert more control in aspects such as supply chain, which will help it adapt quickly to consumer trends. The need to be more nimble like Ted’s fast-fashion competitors became more pertinent during the pandemic.  

Opportunities 

New website should boost international sales – The online channel is well-established in its domestic market, but there is much more scope to increase its ecommerce turnover and this has become a priority in the wake of the pandemic. To this end, the retailer has partnered with SaaS provider BigCommerce on a new online site to enable it to expand its international presence as a digital-first brand.  

Transferable globally – Continued growth overseas suggests the brand qualities are transferable across a global audience. There is plenty of scope for further expansion, particularly in Asia where it is still in the relatively early stages.  

Licensing – Ted Baker has extended the brand into other categories, such as fragrances, watches and jewellery and there should be opportunity to broaden these activities. 

Strengthening supply chain – Operationally there is plenty of scope for improvement at Ted Baker. Aiming to build a “leaner, quicker supply chain” will help the retailer deliver on monthly product drops to ensure it maintains relevance. The fact that it has only recently switched to an open-to-buy model – allowing it to stock the right amount of the right products at the right time – shows how far off the pace it had slipped in comparison to some of its rivals. However, it made good early progress, having already halved its supply base to around 100 suppliers as of June 2020, shortened the stock cycle from three years to two and rapidly improved its speed to market from 14 months to just eight weeks. It also launched ship from store functionality, aided by tech firm OneStock, to help boost online product availability and reduce logistical costs. 

Widening proposition – The retailer has been aiming to be less reliant on categories such as formalwear and to broaden its proposition in categories such as women’s casual wear, footwear and accessories while building a core of “never out of stock” ranges. 

Upgrading legacy systems – In recent years Ted Baker earmarked significant investment for updating and enhancing its ecommerce platform and legacy systems. Ongoing investment in business-wide IT systems has also included ship-from-store, and wider infrastructure projects. 

Customer insight – Building on customer insight is a priority, and initiatives include a cloud based global POS, digital data capture at stores and e-receipts, as well as omnichannel order fulfilment for same day click and collect. 

Threats 

Over-expansion – There is always a risk of overexpansion, but management has maintained a generally measured approach to international development and the mature UK market has experienced only limited expansion in recent years. 

Eroded margins – Although Ted Baker is historically known for maintaining its full price stance with margins benefiting from full-price sell through, heavy promotional activity in response to tough trading conditions has eroded margins. There has more recently been a renewed focus on profitable growth. 

New leadership and a potentially dented reputation – The quirky brand individuality that Ted Baker thrives on has historically been intrinsically linked with founder and former CEO Ray Kelvin and so the retailer felt the loss when Kelvin exited the company on the back of staff allegations of harassment, which he denied. However, Kelvin’s involvement through a new ‘relationship agreement’ from late 2020, could bolster the business through his ‘unique brand experience and insight’ as his views and interests are represented by non-executive director Colin La Fontaine Jackson. 

Exposure to concessions – Ted Baker had been expanding through concessions. However, sales dipped and profits collapsed in FY2019 and again in FY2020, and former CEO Rachel Osborne has conceded that the business has been left exposed to struggling sectors of the market such as its concessions in department stores. The retailer appeared to take action with the number of concessions across the UK and Europe territory significantly reducing over the past few financial years.