Ted Baker CEO and Founder, Ray Kelvin, has resigned from his position at the British company following an internal inquiry regarding alleged harassment of staff. Kelvin had been on an indefinite leave of absence since December, when the initial allegations were made, but won’t be returning to the business.
Left - Ted Baker, Founder & Former CEO, Ray Kelvin
Ted Baker was founded in Glasgow in 1988 by Kelvin, initially selling men’s shirts and later expanding into womenswear in 1995. Ted Baker’s huge success, a yearly turnover of £590m and nearly 500 stores worldwide, is undeniably down to Ray Kelvin’s individual hand. On his resignation, Kelvin said, “The past few months have been deeply distressing and I’ll now be taking time privately with my family to consider what my next adventure will be. Bye for now, Ray.”
Whether you like the brand or not, you can’t ignore its growth and consistency over the past 30 years. Kelvin’s hard work, attention to detail, quality control and quirky aesthetic has amassed a huge global fan club. While the majority of people wearing Ted Baker would never have heard of Ray Kelvin, they have definitely experienced his overriding vision and eye. It’ll be interesting how the brand maintains that momentum without him.
Founders are very important to fashion companies and they are seldom as exciting after the founder has left. Fashion businesses need strong people with personality and a determined vision of the direction they need to go in. Arguably, fashion needs these people even more than other industries because it is such an instinctive industry. It’s unpredictable and data often won’t help. You need to follow the leader’s instinct and feel for things if you are to react quickly and timely. Design and decisions by committee is often more conservative and slower and why many companies quickly flounder.
Kelvin’s long-running desire not to be photographed or uncover the fact he’s the real Ted Baker can be twisted to make him look like he was trying, or had something to hide. Ted Baker, up until recently, didn't advertise and had a distorted relationship with the press.
This is not to condone anybody’s negative actions and anything illegal should be prosecuted, but when does a dominating character become a bully? One person’s clash of personalities is another person’s intimidation. One person’s eccentric way of greeting people, or “banter”, can be another person’s sexual harassment or racist allegation. The line of unacceptability is subjective and often blurred.
Whether it’s Philip Green or another titan of industry, people are, rightly, responsible for their language and actions and companies have to be seen to take any allegations seriously. Nobody is untouchable anymore. Good. We live in an age where you can’t have any element of doubt. If in doubt, then you are automatically guilty. Which puts potentially innocent people into a indefensible grey area and they are shown the door. You shouldn’t or can't hold onto people at any cost, even if they are the founder, and it’s a verdict of guilty, instantly.
Ted Baker had a tsunami of allegations following a petition signed by 200 staff and it’s very hard to accuse somebody that doesn’t appear to have anybody to control their behaviour. Nobody should feel like they are being bullied or pressurised into anything they aren’t comfortable with. It creates a toxic environment and may explain a high turnover of staff. People make a business' culture, but it needs to come from the top down.
The shift in society is, rightly, now, controlling these people and losing their positions of power is what will be their biggest loss. This isn’t a gender issue. This isn’t about men. It’s about people in positions of power abusing those positions. It’s that feeling of knowing people have to do what you say and pushing that into a different and negative dynamic. This abuse is what is a shame, as it’s the same energy, when positive, which makes these companies great. It’s the energy of trying something new, sticking your neck out or pushing a few different buttons. Again, particularly important in the fashion and creative industries.
Whether it’s Ted Baker or Arcadia, you wonder whether these companies’ successes could be replicated as big and as quickly in the #metoo era. You have to break a few eggs to get ahead and often upset and disagree with a few people on the way. Fashion businesses need strong and successful characters to make things happen, but it doesn’t mean they can do whatever they like.
To call it a recession is maybe a little extreme, but let’s call it a contraction. Menswear is struggling. Some are mouthing the word #brexit but this was coming way before that and affecting international markets too, most notably America.
Like everything that goes in cycles, you have your ups and you have your downs. We’re definitely in a down cycle as brands merge their men’s and women’s and reduce the amount of labels within their brands.
Left - Inside menswear is screaming
Many are private companies so they don’t disclose profits, but when you have menswear giants like Armani and Ralph Lauren losing labels - Collezioni and Armani Jeans in the case of Armani and store closures - in the case of Ralph Lauren - then things are clearly unsustainable.
Why is this happening? The first big answer is a saturated market. Do we need much more ‘stuff’? When Ikea’s head of sustainability, Steve Howard, said we’d reached “peak stuff”, he hit the nail on the head. We’ve seen expansion online and offline and our wardrobes are bursting with clothes at every price point.
Designer fashion isn’t coming up with many new ideas and this has lead to the high-street bringing the new ideas and offering improved quality that many men are happy with. I think companies like ASOS are doing well because people are trading down to cheaper and more fun fashion and don't really wear it long enough to care about the quality.
Brands like Topman have got more and more expensive and are not reactive enough to trends and the latest gimmicks and fashions. They’ve believed in their own ‘cool’ which is dangerous for any brand. Arcadia, Topman’s parent company, has seen many high profile departures lately. Craig McGregor left his role as retail director at Topshop/Topman, after eight years, and Topshop/Topman global commercial director Matt Brewster is leaving the company. Wesley Taylor left his role as managing director of Burton and Yasmin Yusuf left as creative director of Miss Selfridge, both after more than 10 years at the business. Which all suggests the epic growth Arcadia has experienced over the last few decades has now ground to a halt. They are no longer the darling of the British high-street.
Another reason for the men’s downturn is competition is fierce and this had lead to a discount environment. People know they can wait for the sale or search the internet for a discount code. This makes margins smaller for companies which then need to sell even larger volumes. We’ve also seen growth in companies like TK Maxx that offer people the brands they want, but with heavy discounts.
Fashion has changed too. It’s very sportswear/dress down driven. These are cheap or old clothes. Looking ‘expensive’ has gone out of fashion. Brands like Balenciaga and Gosha Rubchinskiy have pioneered this style of fugly fashion and while not cheap they have prices that are more realistic and attainable.
Millennials are all about ‘experiences’ and are less materialistic, or so we’re are told. All those selfies tell a different story, but I think they want to eat out and wear something new, which ultimately means spending less. This big group of young consumers is squeezed by rents, student loans and low wages and this isn’t going to change for the foreseeable future.
In the Evening Standard on Monday, Net-a-Porter/Mr Porter boss, Alison Loehnis, said when they measured “zeitgeist buying” in the Mr Porter team they discovered the number one item was socks. “Followed by Ray-Bans and trainers.” Socks?!! Now, that is worrying. Unless Mr Porter is selling hundreds of millions of dollars worth of socks, which I doubt, then it’s a signifier of the market. It’s too expensive and they are the cheapest things they sell. It’s also one of the main gifting items and something you don’t need to try on.
Online is still only 10% of the retail market so has huge potential, but that still means 9 in every 10 pounds is spent on the high street.
Net-a-Porter/Mr Porter call their top customers ‘EIPs’, (EXTREMELY IMPORTANT PERSON) and these EIPs are the two per cent of customers who account for 40 per cent of NAP revenue. It’s dangerous to have all your eggs in a few baskets, particularly a fickle customer which many others are chasing. They’re now offering a service where the driver waits while these EIPs try things on. It’s a gimmick, but at least it shows they’re trying. These EIPS are the people shopping in Selfridges and Harrods too, while the rest of us have seen our wage packets shrink or not go as far and designer prices continue to rise. #Brexit will make imports to the UK more expensive, temporarily, but fashion will just find somewhere cheaper to make it, but it’s true the weakest wont survive this price hike or margin cut.
Brands have been trimming the fat over the last few years and many are down to the bare bones. The recent christmas was good for retailers and I think that kept many afloat, for now.
Jaeger just announced its bankruptcy. I don’t think there’s much hope for it to survive as it is, but it’ll become a brand within Edinburgh Woollen Mill or the like. It’s the sign of the times and also the cycle of brands. There are times when a brand runs its course and no matter how much investment or time, it’s just time to let it go.
Okay, enough doom and gloom. On a positive note from a down you have an up and when a gap appears something new will come into fill it. But, our addiction to cheap clothes isn’t going anywhere which will make it very difficult for new, smaller brands or labels to compete. I think short term we’ll see more closures and less choice or a choice masked by the fact it’s a sub brand from a big retailer. H&M is just about to launch Arket.
One thing is for sure, fashion is unpredictable and that’s why I love it.