Ahead of its Christmas trading update, Ted Baker’s banking syndicate have reportedly hired restructuring experts to carry out a review of the retailer’s prospects. The beleaguered high street retail chain has been the victim of a perfect storm. The sudden departure of its founder under a cloud was followed by accounting inventory errors which led to a string of Board resignations. The current economic climate hasn’t helped, but the issues have exposed wider issues with the Ted Baker business model and brand image.
Ted Baker’s UK high street presence - once a source of strength - has become a source of weakness. Its heavy reliance on third party department stores like House of Fraser and Debenhams in the UK and Nordstrom in the US has resulted in a hit financially and to its brand presence as outlets have closed or been scaled back.
But beyond this, there are issues more specific to Ted. The brand has been positioned in the upper middle segment of the market - Ted Baker’s comfort zone in its noughties heyday - which has become a really dangerous place to be. As a result, although the entire retail sector is beset by price discounting, the value of Ted Baker’s brand image in recent years has been eroded more than most due to the frequent sales and price slashing it has been forced to make outside of the traditional sales periods. This is a particularly dramatic example of the loss of discounting rhythm many retailers are experiencing.
It’s hard to discern a particular ethos or aesthetic that is driving the brand at this stage, unlike similarly priced competitors such as AllSaints. Ted has also fallen behind on sustainability values, at a time when consumers are more concerned than ever about the environmental impact of the clothing industry. Powerful brands remove barriers, helping us better engage and connect. They create unified experiences across the customer journey and across all touchpoints. It’s as much about the way they operate as how they look and feel. Without a strong purpose, it will be difficult for Ted Baker to deliver the sort of engaging consumer experience that can drive footfall and loyalty. In short, Ted needs to rediscover what makes it Ted.
Extracts of this article were first published in Fortune
