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Ted Baker probes £25m stock overstatement Ted Baker shares tumble on fresh setback
(32 minutes later)
Fashion retailer Ted Baker has said it may have overstated the value of its stock by between £20m and £25m.Fashion retailer Ted Baker has said it may have overstated the value of its stock by between £20m and £25m.
Law firm Freshfields Bruckhaus Deringer is to carry out a review, and independent accountants will also be appointed to investigate.Law firm Freshfields Bruckhaus Deringer is to carry out a review, and independent accountants will also be appointed to investigate.
Ted Baker said it did not expect any cash impact, but one analyst said the timing was "less than ideal". Shares in Ted Baker fell 10% as analysts described the news as "less than ideal"
Earlier this year, the company's former boss Ray Kelvin stepped down over misconduct allegations. This year, former boss Ray Kelvin stepped down over misconduct claims, while sales and profits have tumbled.
The company said in a statement: "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 company said in a statement: "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 problems are the latest setback for the firm. Mr Kelvin left in March following harassment allegations. Ted Baker added, however, that it did not expect any cash impact from the overstatement of inventory. Essentially, Ted Baker may have had up to £25m of stock, mainly clothing, on its balance sheet that did not exist.
Mr Kelvin, who had been chief executive since the company's launch in 1988, resigned over claims he presided over a culture of "forced hugging". He has denied all allegations of misconduct. The problems are the latest setback in a difficult year for the firm.
The company has also seen its sales, profits and share price tumble. In October, the retailer reported a £23m loss for the six months to 10 August, down from a £24.5m profit last year. The company is due to publish its latest trading next week. In March, Mr Kelvin - who had been chief executive since the company's launch in 1988 - resigned over claims he presided over a culture of "forced hugging". He has denied all allegations of misconduct.
Analysts at Liberum said: "Today's latest news from Ted Baker, regarding the overstatement of last year's inventory value, is less than ideal." The company has also seen its sales, profits and share price tumble. In October, the retailer reported a £23m loss for the six months to 10 August, down from a £24.5m profit last year.
Retail analysts at Liberum said: "Today's latest news from Ted Baker, regarding the overstatement of last year's inventory value, is less than ideal."
The company is due to publish its latest trading next week.