Ted Baker is shoring up its U.S. business.
Three weeks after its master license with Hartmarx Corp. officially dissolved — and with it the brand’s primary marketer, distributor and operational partner in the U.S. — Ted Baker is on the offensive.
The U.K.-based company has named Patrick Heitkam as its first U.S. head of licensing and wholesale sales. The former Nordstrom Inc. buyer and Barneys New York divisional executive will be tapped with rebuilding the licensing business in the U.S. and bolstering its wholesale operations.
The brand’s nine retail stores in the U.S. will continue to be managed by corporate headquarters in London.
“Ted has built an enviable following in the U.S. since its launch in 1996. I am delighted that industry leader Patrick Heitkam has joined us,” said Ted Baker founder and chief executive officer Ray Kelvin. “He will enable the brand to move to the next stage of growth and development in this market.”
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However, the break from Hartmarx may temporarily disrupt a few major categories for the brand. Men’s and women’s sportswear and men’s tailored clothing, both of which were produced and distributed by Hartmarx, will likely scale back or drop deliveries this fall as the company considers its options. For now, the company will also function without its Manhattan showroom, which was operated by Hartmarx.
“We are reviewing each category and looking at both licensing and producing [those classifications] in-house,” said Heitkam. “We are not looking for another master license.”
He said men’s sportswear, tailored and women’s sportswear would return to the market in a complete way no later than fall 2010.
In the meantime, key categories, including Hartmarx’s former sublicenses for neckwear, men’s jewelry and small leather goods, footwear and eyewear, will now be directly managed by Heitkam, who said those products will continue to ship in the U.S. without interruption.
Ted Baker neckwear and small leather goods are distributed in Nordstrom and Bloomingdale’s. The brand’s footwear is available at Macy’s and independent shoe stores. Eyewear is sold to more than 1,000 independent optical retailers in the U.S., according to Heitkam.
The moves mark a turning point for the brand, which, despite its continued global growth, has not extended its gains in the U.S. market. Corporate revenue was up 7.3 percent to 153 million pounds (or $252 million at current exchange) for the year ending Jan. 31. The brand’s U.S. retail division posted a 2.6 percent sales decline to $19 million during the same period.
The company did not break out U.S. wholesale figures, but sources at Hartmarx said the wholesale business failed to meet early expectations of grossing $100 million annually. Ted Baker’s U.S. wholesale business is said to generate less than $40 million in sales.
“I believe there is plenty of opportunity in this market,” said Heitkam. “The brand is so robust worldwide. We’re going to more closely model [it] after the U.K. business, which has been so successful.”
The company is already pushing ahead with plans to ramp up its directly owned retail network here. Come October, Ted Baker will open a unit on Newbury Street in Boston. It is also close to signing a lease in Santa Monica, Calif.