Ted Baker has warned that an inventory overvaluation it flagged in December is likely to be more than double initial estimates, in yet another blow to the flailing fashion retailer.
The group said on Wednesday that an independent review into the overstatement was nearing completion and indicated that the value of stock on its balance sheet early last year had been £58m too high. In December it had estimated the impact at £20m-25m.
The revelation that the overstatement was significantly worse than anticipated comes as yet another blow to the clothing group, which has floundered since allegations came to light of inappropriate behaviour towards staff by its founder, Ray Kelvin.
In December, its chief executive Lindsay Page resigned after just months in the job as it issued its fourth profit warning of the year, when it said full-year profits would drop by as much as 90 per cent, with little expectation of an improvement in trading.
The inventory review was carried out by Deloitte and analysts have suggested the disclosure was part of “early stage work” by new finance chief Rachel Osborne, who is also standing in as interim chief executive.
Ted Baker reiterated that any adjustments were not related to this financial year.
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