CASH TRAP
Struggling fashion retailer follows UK wing into bankruptcy in US and Canada putting 59 stores at risk of closure
The chain has avoided an outcome that would've seen dozens of stores close immediately.
TED Baker US and Canadian chiefs have filed for bankruptcy sparking uncertainty for the future of dozens of stores.
It comes just weeks after the beleaguered retailer in the UK plunged into administration.
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Execs filed for bankruptcy in Toronto earlier this week, per Bloomberg.
Then a motion was filed in New York.
The future of 59 stores across Canada and the US is uncertain, potentially impacting more than 600 workers, per The Wall Street Journal.
Partners of Authentic Brands Group reportedly stopped paying Ted Baker's suppliers, according to court documents seen by The Wall Street Journal.
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This sparked delivery delays and also led to customers’ orders getting canceled.
The company experienced a dip in sales, but chiefs have pinned other factors on the downturn.
Authentic Brands Group bought Ted Baker in 2022.
Ted Baker has a presence in the major American and Canadian cities of Houston, Los Angeles, Toronto, Calgary, and Vancouver.
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Execs have blamed technological changes that happened during the busiest selling season.
A Canadian bank is set to inject $7 million into the fashion company – a move that's set to prevent the abrupt closure of stores.
But the North American wings of the company have faced financial challenges.
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More than $5 million in losses before tax were reported in 2023.
Meanwhile, the owners of the Canadian wing admitted the company had struggled to boost its cash flow and reduce costs, per CBC News.
Ted Baker entered administration in the UK in March, putting almost 1,000 jobs at risk.
If the retailer disappears from the map, more than 40 stores could close.
TRANSATLANTIC STRUGGLES
More than 10 stores in the UK, including in cities such as Liverpool and London, were expected to close by April 19.
Chiefs at Authentic Brands Group have tried to reassure shoppers by saying the chain will continue trading online and in-store.
“We wish that there could have been a better outcome for the Ted Baker employees and stakeholders,” John McNamara, the chief strategy and transition officer, told Fashion Network.
Ted Baker is not the only retail chain that has faced or is experiencing financial difficulties.
Last month, bosses at the appliance retailer Pirch abruptly closed its stores.
Chiefs filed for bankruptcy and the company reportedly owes between $100 million and $500 million to its creditors, per court docs seen by the NBC-affiliate KNSD.
Bosses explained the decision to abruptly close stores would give them the space to try and create a future plan, per a note on the chain’s website.
“We are navigating through various options,” it said.
“We take this situation very seriously and are working diligently to resolve it.”
The U.S. Sun reported the fashion retailer Express has entered bankruptcy.
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Bosses revealed 95 stores would close and liquidation sales started from April 23.
Chiefs have tried to reassure shoppers by stressing the company is still accepting orders, fulfilling refunds, and stores are open as normal.