U.S. private equity firm Sycamore Partners is looking across the pond and contemplating an acquisition of fashion retailer Ted Baker.
Sycamore, a voracious acquirer that is also said to have recently shown interest in buying the activist-pressured Kohl’s Corp., officially revealed its interest in a potential deal with Ted Baker in a U.K. regulatory filing.
“The company confirms that it is in the early stages of considering making a possible cash offer for Ted Baker,” Sycamore said. “There can be no certainty that an offer will ultimately be made nor as to the terms on which any offer may be made.”
U.K. rules require that Sycamore either move ahead with an offer or drop it and move on by April 15.
In a similar regulatory filing, Ted Baker’s board confirmed that it has “not received any approach from Sycamore” as of yet.
Related Galleries
“Ted Baker continues to make good progress with its transformation and the company is emerging from COVID-19 as a stronger and more financially sustainable business,” the company said. “The board is confident in the company’s independent prospects and would evaluate any offer for the company against the strong shareholder value creation that it believes can be delivered as a stand-alone company.”
Ted Baker investors welcomed the interest and sent shares of the company up 17.1 percent to 1.16 pounds, for a market capitalization of 232.2 million pounds.
The company was founded by Ray Kelvin in 1988 in Glasgow and from a base on the British high street developed a global presence. Kelvin, however, resigned as chief executive officer in 2019 amid allegations of misconduct and inappropriate physical contact with staff.
Kelvin always denied the allegations, which had been reported by members of staff on the website Organise.
The past few years haven’t been easy for Ted Baker. Following Kelvin’s resignation, the company went on to face a series of crises, including a string of profit warnings, accounting and management troubles, and a revolving door of top managers.
In 2020, John Barton took over as non-executive chairman of Ted Baker, while Rachel Osborne was promoted to the role of CEO. Formerly Ted Baker’s chief financial officer, Osborne was the third person in 12 months to hold the CEO role at the company.
Barton died suddenly in December, and the company has been without a chairman since then.
The company has made improvements in recent years, with fourth-quarter sales in fiscal 2022 climbing 35 percent year-over-year, according to a trading update last month. The company will announce its results for the 52-week period ended Jan. 29, 2022, in May.
In the 2021 fiscal year, the company reported 352 million pounds in revenue, an operating loss of 98.9 pounds, and after-tax loss of 86.4 million pounds.
MORE FROM WWD:
Rihanna Is Getting a Wall Street Education With IPO Prep