Ted Baker Canada Inc. et al., Ontario-based companies which operate a fashion clothing and accessories retail, wholesale and ecommerce business in Canada and the US, obtained CCAA protection on April 24.
In Canada, Ted Baker operates 25 retail store locations under the Ted Baker (9), Lucky Brand (7) and Brooks Brothers (9) banners, with approximately 280 employees, as well as 6 retail concession locations in certain HBC stores. It operates through license agreements with Authentic Brands Group (“ABG”), which was Ted Baker’s indirect parent until it was sold to OSL Fashion Services in early 2023.
In August 2023, the companies acquired certain assets relating to the Lucky Brand and Brooks Brothers brands partially using a CIBC loan on which US$31.6 million currently remains outstanding. Since the acquisitions, the companies have struggled and the consolidated business has failed to achieve positive cash flow.
The companies cite supply chain issues and accelerating payment terms imposed by suppliers following the insolvency of the Ted Baker business in the UK, as well as a transition to a new technology platform during the busiest selling season and low sales more generally as contributing to their poor financial situation.
The purpose of the CCAA proceedings is to obtain breathing room and DIP financing provided by CIBC while the companies explore their options. They have sought recognition of the CCAA proceedings as foreign main proceedings under Chapter 15 of the US Bankruptcy Code.
A&M is the monitor. Counsel is Osler for the companies, Bennett Jones for the monitor, Blakes for CIBC and McCarthys for OSL.
By: Dina Milivojevic
