Ted Baker’s European retail and online arm is to appoint administrators, putting almost 1,000 jobs at risk at the British brand.

The fashion brand, which has 46 stores in the UK and Europe, has been struggling for several years as it faced increasing competition and the fallout from the exit of its founder, Ray Kelvin, who stepped down in 2019 after allegations of “forced hugging”.

In 2022 the then listed retailer, which had 500 shops and concessions around the world, agreed a cut-price £211m takeover by Authentic Brands Group (ABG), the US group that owns Reebok and a stake in David Beckham’s clothing and merchandise empire.

That came after No Ordinary Designer Label (NODL), the holding company for Ted Baker’s European retail arm, reported a pre-tax loss of £43m in the year to January 2022 on sales of nearly £320m according to the last accounts to be published at Companies House.

At the time, the division employed just over 1,200 people in the UK, including nearly 500 at its head office. It is now understood to have 975 employees in the UK and mainland Europe.

ABG has been considering options for the future of NODL since the end of January when it terminated a deal with the Dutch company AARC, which operated Ted Baker’s retail stores and website in the UK and Europe.

The brand has stores in the US, Asia and the Middle East as well as Europe. It also sells directly to department stores and licenses out its brand for products including childrenswear and lingerie, both of which are run by Next. The licences, franchises and US business are understood to be unaffected by the problems at NODL.

John McNamara, the chief strategy and transition officer for Authentic Brands Group, said: “Despite our tireless efforts, the damage done during a period under AARC in which NODL built up a significant level of arrears was too much to overcome.

“We wish that there could have been a better outcome for the Ted Baker employees and stakeholders. It is hopefully some consolation for customers that NODL will continue to trade online and in stores.

“We remain focused on securing a new partner to uphold and grow the Ted Baker brand in the UK and Europe where it began.”

Authentic Brands said Ted Baker stores and the retailer’s website would continue to trade during administration.

Last month it was reported that Ted Baker was considering an insolvency process to enable it to close stores as it faced a high rent bill at its UK outlets.