Ted Baker UK to move HQ from Ugly building to Gorgeous Brown Building

27 Jul '21

2 min read

Pic: CL-Medien / Shutterstock.com

UK-based global lifestyle brand Ted Baker has ditched the Ugly Brown Building for a swanky new Gorgeous Brown Building, its new global headquarters at 101 on Cleveland in the heart of Fitzrovia, London. Under the 10-year lease agreement with Westminster City Council, the Group has secured 30,000 square feet of net space at a cost of £30.33 per square feet.

The company expects to move during Summer 2022, the company said in a media release.

The new headline annual rent will be £0.9 million at Gorgeous Brown Building (GBB) compared to the current £3.25 million annual rent for Ugly Brown Building (UBB), and up to £4.2 million in relation to option to lease for Block A of the Tribeca development in Kings Cross. These savings are separate to the fixed rent cost saving target of 15 per cent for financial year 2022 that the Group announced at its Preliminary Results on June 14, 2021.

As part of the transformation plan that was launched in June 2020, the Group completed the sale and leaseback of its long-time global HQ, the UBB, for £78.75 million, alongside a short-term leaseback until March 31, 2023. The deal included an option to lease the redeveloped next door building Block A. Over the first five years of the GBB lease, aggregate cashflow benefit of the new HQ is more than £13 million compared to the lease on Block A.

Under the sale and leaseback agreement on UBB last year with BA Pension Fund, the Group negotiated an £8 million cash payment to use for the fitout of a new HQ. The Group will use this £8 million to ensure no net additional capex is spent on the new HQ. Therefore, the Group reiterates its previous capex guidance of £15 million for the financial year to January 2023.

The total annual rent bill of £0.9 million will be funded by the Group's existing resources. Accounting for the lease under IFRS16, a right of use asset worth approximately £6 million will be reflected on the Group's balance sheet, along with an associated lease liability of approximately £8 million.

“Having spent more than 20 years in the Ugly Brown Building, it will be invigorating to be in our new site in Fitzrovia. Times have changed, as have our ways of working, and our brand has a refreshed personality and energy, which will be perfectly reflected in the Gorgeous Brown Building,” said Rachel Osborne, CEO.

Fibre2Fashion News Desk (KD)

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