TIDMTED
RNS Number : 3177K
Ted Baker PLC
28 August 2019
28 August 2019
Ted Baker Plc
(the "Group")
Appointment of Japanese Retail Licence Partner
-- Conversion of existing directly operated business into
an exclusive retail licence for the Japanese market, effective
1 October 2019.
-- Sojitz Infinity as appointed Japanese Retail Licence Partner
will leverage its local market knowledge and expertise
to accelerate the long-term growth of Ted Baker in Japan.
-- Anticipated transaction related costs of approximately
GBP4m, of which approximately GBP3m are anticipated to
be in cash.
-- It is expected that the new operating model will have a
marginally positive impact on pre-tax profit* from the
current financial year and greater benefit in the further
years of the licence.
Ted Baker, the global lifestyle brand, is pleased to announce
that on 28 August 2019, it entered an agreement with Sojitz
Infinity Inc. ("Infinity" or the "Licence Partner") to create an
exclusive retail licence deal for Japan, initially for five years.
Infinity will drive the long-term expansion of the Ted Baker brand
in the region, combining its local expertise, especially within the
department store sector, with the proven buying, merchandising and
brand-building expertise of Ted Baker. The Group anticipates the
retail licence commencing on 1 October 2019. Following this
appointment, Ted Baker will have 17 Retail Licence Partners across
the globe, extending its successful and proven operating model.
Over recent years, the Group has invested in introducing and
developing the Ted Baker brand in the Japanese market. To date, the
Group has opened five stores in the territory to build awareness
and understanding of the Ted Baker brand. Infinity intends to build
on the Group's existing store portfolio, expand the concession
network and invest in Ted Baker's online presence.
Transaction structure
As part of the appointment of Infinity as its Japanese Retail
Licence Partner, Ted Baker will transfer certain existing assets
relating to its Japanese business (which include existing
non-current stock, fixed assets and leases) to Infinity at nil
value to support the successful transition of the operations. As a
consequence, Ted Baker anticipates exceptional transaction related
costs of approximately GBP4m; the costs include onerous lease
expenses, restructuring charges and deal related costs. The
non-cash charges of cGBP1m include the transfer of non-current
stock and fixed assets. Current season stock is being transferred
on commercial terms. It is expected that the appointment of the
Licence Partner will be accretive to Group pre-tax profit* in the
current financial year. The positive impact of profit will increase
during the further years of the contract.
Commenting, Lindsay Page, Chief Executive Officer of Ted Baker,
said:
"We are very excited about the next stage of growth for the Ted
Baker brand in Japan. Over recent years, we have invested in
introducing Ted Baker to Japanese customers and we are confident
that our new Japanese Retail Licence Partner will build on this
platform and deliver meaningful long-term growth.
In Sojitz Infinity Inc., we have an extremely capable partner
that brings local market expertise to our brand alongside our
already well-established design, buying and merchandising skillset.
This combination will drive an acceleration in performance of the
business. We firmly believe that Japan has the long-term potential
to be an important market for the Ted Baker brand.
I would like to take this opportunity to thank all my colleagues
who have helped establish the brand in Japan. Following our
recently announced Joint Venture in China, including the Hong Kong
S.A.R. and Macau S.A.R. territories, this completes the
reorganisation of our Asian operations and is another step forward
in our strategy to further expand Ted Baker as a truly global
lifestyle brand."
Commenting, Kohei Ono, Chief Executive Officer of Sojitz
Infinity Inc., said:
"We are thrilled to have the opportunity to help build and
develop Ted Baker in the large and unique Japanese market. Ted
Baker is a brand that we have followed since its arrival in Japan
for a long time and believe it has the potential to appeal to more
consumers in this market. Our knowledge and experience in building
fashion brands through stores, concessions and online should add
value to Ted Baker and we look forward to working together."
*Pre-exceptional items
This announcement contains inside information. The person
responsible for arranging the release of this announcement on
behalf of the Company is Charles Anderson, Finance Director &
Company Secretary.
Enquires:
Ted Baker Plc
Lindsay Page, Chief Executive Officer Tel: + 44 (0) 20 7255
4800
Charles Anderson, Finance Director & Company Secretary
Phil Clark, Commercial Director
Hudson Sandler LLP (public relations) Tel: +44 (0) 20 7796
4133
Alex Brennan / Hattie O'Reilly / Nick Moore
tedbaker@hudsonsandler.com
Media images available for download at:
http://www.tedbakerplc.com/ted/en/mediacentre/imagelibrary
Notes to Editors
Ted Baker Plc - "No Ordinary Designer Label"
Ted Baker is a global lifestyle brand distributing across five
continents through its three main distribution channels: retail
(including e-commerce); wholesale; and licensing.
Ted Baker has 560 stores and concessions worldwide, comprised of
201 in the UK, 122 in Europe, 130 in North America, 98 in the
Middle East, Africa and Asia, and 9 in Australasia.
We offer a wide range of collections including Menswear;
Womenswear; Global; Phormal; Endurance; Colour By Numbers;
Accessories; Bedding; Childrenswear; Eyewear; Footwear; Fragrance
and Skinwear; Gifting and Stationery; Jewellery; Lingerie and
Sleepwear; Luggage; Neckwear; Rugs; Suiting; Technical Accessories;
and Watches.
Based on the Group's consolidated, audited financial accounts
for the year ended 26 January 2019, the value of the gross assets
held in Ted Baker Japan KK was GBP3.6m and a loss of GBP2.7m was
attributable to the assets.
Development of the Brand
Our strategy is to enhance our position as a global lifestyle
brand by the continuous development of three main elements of our
business model:
-- Considered extension of the Ted Baker collections to achieve
our brand growth potential. We review our collections continually
to ensure we anticipate and react to trends and meet our customers'
expectations. In addition, we look for opportunities to extend the
breadth of our collections and enhance our offer;
-- Controlled distribution through three main channels: retail
(including concessions and e-commerce); wholesale; and licensing.
We consider each new opportunity to ensure it is right for the
brand and will deliver margin-led growth; and
-- Carefully managed development of existing and new
international markets. We continue to manage growth in existing
territories while considering new territories for expansion.
Underlying our strategy is an emphasis on design, product
quality and attention to detail, delivered by the passion,
commitment and dedication of our teams, licence partners and
wholesale customers.
About Sojitz Infinity
Sojitz Infinity is a fully owned subsidiary of Sojitz
Corporation, a Japanese company listed on the Tokyo Stock Exchange.
Sojitz Infinity has operated in Japan for over 60 years. It has
strong brand building and store roll-out credentials established
through its development of the McGregor brand into almost 250
locations across Japan, consisting mainly of department store
concessions but also a number of outlet stores, several full price
stores and eCommerce capabilities. Sojitz Infinity operates several
businesses across a variety of operating models with Vesvio,
Maurizio Baldassari, Serge Blanco and Vicomte A, covering a further
73 concessions.
Cautionary statement regarding forward-looking statements
This announcement contains certain forward-looking statements.
These forward-looking statements include matters that are not
historical facts or are statements regarding the Group's
intentions, beliefs or current expectations concerning, among other
things, the Group's results of operations, financial condition,
liquidity, prospects, growth, strategies, and the industries in
which the Group operates.
Forward-looking statements are based on the information
available to the Directors at the time of preparation of this
announcement, and will not be updated. The Directors can give no
assurance that these expectations will prove to have been correct.
Due to inherent uncertainties, including both economic and business
risk factors underlying such forward-looking information, actual
results may differ materially from those expressed or implied by
these forward-looking statements.
This information is provided by RNS, the news service of the
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END
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