Private equity firm Sycamore Partners is said to be considering a potential bid for UK retailer Ted Baker, as reported by Sky News. Although no formal approach has been made, Sycamore is believed to be working with advisers to explore the possibility of an offer. This news has resulted in an over 8% increase in Ted Baker’s shares, despite the fact that the company’s market capitalisation is currently below £170 million.

Sycamore Partners is an experienced retail specialist based in the US and previously owned Kurt Geiger. It has also been linked to a $9 billion bid for US department store chain Kohl’s and was rumored to have expressed interest in acquiring Boots at one point. Although Sycamore has reportedly enlisted the help of an investment bank to assist in the potential deal, it is still uncertain whether an offer will materialize.

Ted Baker has faced significant challenges in recent years, leading to a significant decline in its share price. The company has encountered problems such as an internal scandal involving its founder, accounting errors, and the impact of the pandemic. Additionally, the loss of its esteemed chairman, John Barton, last year was a major blow. However, recent sales figures indicate a positive turnaround, with increased sales in the 12 weeks leading up to the end of January.

Considering Ted Baker’s status as a key player in the UK retail industry with a strong international presence through its concessions worldwide, any potential bidder would likely need to pay a premium to acquire the business. However, the company is currently focused on its turnaround efforts and may not actively be seeking a takeover.

Overall, while the potential private equity bid adds uncertainties to Ted Baker’s current situation, the company remains committed to its turnaround programme and cautiously optimistic about its future prospects. The market will closely monitor any further developments as the story unfolds.

Useful links:
Reuters – Sycamore Partners considering bid for Ted Baker
Bloomberg – Ted Baker attracts private equity firm interest