Ted Baker investigating £20m stock overvaluation
Share price plunges after latest blow to fashion retailer
Fashion chain Ted Baker has warned that it might have overstated the value of its stock by between £20m (€23.4m) and £25m.
The retailer has appointed independent accountants to investigate .Law firm Freshfields Bruckhaus Deringer will also conduct a review.
A company statement said: “Ted Baker is committed to ensuring the independent review is completed in an efficient and transparent manner and will update the market as appropriate. Whilst the review is ongoing, the company will not comment further.”
The error relates to previous years and will not affect Ted Baker’s financial position or performance this year. However the announcement triggered a sell-off, with the embattled company’s share price falling 9.31 per cent by mid-morning trading to 360.60 pence.
Ted Baker has been hit by a number of setbacks this year. In March founder and chief executive officer Ray Kelvin was forced to stand down following allegations of “forced hugs” and harassment. The internal investigation and legal ramifications cost £2m.
Then in October the retailer reported a £23m first-half loss, its first such loss in more than 20 years. The company has stressed the wider decline of the UK retail industry and says “distressed discounting” by rivals had led it to cut prices.
With three profit warnings, the departure of veteran chief financial officer Charles Anderson to Mulberry and a share price drop of almost three quarters since the start of 2019, however, Ted Baker’s troubles outpace market trends.
The retailer will give its latest trading update on December 11.
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