(Bloomberg) — Ted Baker Plc shares gained the most in almost two years after Sycamore Partners Management LP said it’s considering making an offer for the U.K. fashion brand, which lost more than 90% of its value in the past four years.
The private equity firm said Friday the considerations are in the early stages and there’s no certainty it will make an offer. Ted Baker shares rose as much as 23% in early trading, giving the company a market value of 223 million pounds ($293 million).
Chief Executive Officer Rachel Osborne has been seeking to revive Ted Baker by cutting debt and product markdowns, boosting online sales and refreshing the brand. The retailer’s founder Ray Kelvin departed in 2019 after being accused of inappropriate hugs and other behavior in the workplace, which he denied. The company last month reported a 35% gain in fiscal fourth-quarter revenue.
“The Board is confident in the company’s independent prospects,” Ted Baker said in a statement, adding that it would evaluate any offer “against the strong shareholder value creation that it believes can be delivered as a standalone company.”
Sycamore would have three key shareholders it would need to convince on a bid: Toscafund Asset Management, which owns a 27% stake; Kelvin, who has about 12% and Schroders Plc, which has 8.8%, according to data compiled by Bloomberg.
Sycamore is a New York-based fund that focuses on consumer and retail businesses, with about $10 billion in capital. Bloomberg reported in January Sycamore was one of several firms considering a bid for Walgreens Boots Alliance Inc.’s international drugstore unit. Sycamore previously owned brands including Kurt Geiger and Nine West. Recently, it has reportedly been targeting Kohl’s, a U.S. department store chain.
Upmarket Casual
Kelvin built the chain from a single shirt shop opened in Glasgow in the late 80s into a company with about 376 stores and concessions in the U.K., as well as some overseas markets like the U.S., the Middle East and China. It’s known for upmarket casual clothing for men and women, selling through its own outlets as well as concessions in department stores. Ted Baker also has expanded into accessories, perfumes and watches.
U.K. takeover rules give Sycamore until April 15 to either announce a firm intention to bid or to say it won’t make an offer.
Sky News reported after the market closed on Thursday that Sycamore was considering a bid.
Ted Baker has been seeking a replacement for Chairman John Barton who died in December.
(Updates with Ted Baker response in fourth paragraph, details on company in seventh)
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