Stock horror as Ted Baker is overvalued by £25million

SHARES in Ted Baker plunged yesterday after bosses revealed the fashion house has £25million less stock than stated in its accounts.

The board has brought in lawyers and accountants to assess the ‘ inventory issue’, which the company insisted will have no cash impact and only relates to previous years.

Analysts suggested the move is the first significant step taken by new finance chief Rachel Osborne, who joined from Debenhams in October, to get to grips with the firm’s accounts.

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. In our view, it is indicative to some degree of the very earlystage work that the new and highly regarded CFO, Rachel Osborne, is undertaking.’ The multi-million-pound ‘black hole’ is the latest shock to rock to Ted Baker. In March this year, founder and former chief executive Ray Kelvin (pictured) resigned following allegations of inappropriate behaviour and unwanted sexual advances in the workplace. Mr Kelvin, 63, has denied any wrongdoing.

The company 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. While the review is ongoing, the company will not comment further.’ Auditors at KPMG raised ‘ significant issues’ in relation to the overstating of Ted Baker’s inventory and its retail assets in their last annual report. But they said the issues were ‘too small’ to affect the financial statements.