Ted Baker tanks again af­ter £25m ac­count­ing blun­der

Scottish Daily Mail - - City & Finance -

TED Baker shares hit a ten-year low af­ter a fresh cri­sis en­gulfed the strug­gling fash­ion chain.

Bosses ad­mit­ted that the value of its stock had been over­stated by be­tween £20m and £25m. They have called in lawyers from ‘magic cir­cle’ firm Fresh­fields and in­de­pen­dent ac­coun­tants to find out how the mistake was made.

It is the sec­ond time the com­pany has called in ex­ter­nal in­ves­ti­ga­tors this year, af­ter founder Ray Kelvin was forced to re­sign as chief ex­ec­u­tive in March fol­low­ing a ‘forced hug­ging’ scan­dal.

Ted Baker shares fell 8pc, or 31.6p, to 366p – a level not seen since 2009. The shares have fallen 83pc since Jan­uary, with the com­pany val­ued at £163m.

The dis­cov­ery of the ac­count­ing blun­der comes weeks the ar­rival of fi­nance chief Rachel Os­borne, who joined from Deben­hams in Oc­to­ber.

Re­tail an­a­lysts at Liberum said the news was ‘less than ideal’, while Peel Hunt said: ‘For an av­er­age-listed busi­ness, this would be a bump in the road, but for Ted Baker it’s the lat­est in a se­ries of set­backs.’

Ted Baker is still reel­ing from the de­par­ture of Kelvin amid al­le­ga­tions of in­ap­pro­pri­ate be­hav­iour and un­wanted sex­ual ad­vances, which in­cluded forced hug­ging and ear kiss­ing. Kelvin has de­nied any wrong­do­ing.

The lat­est fall in the share price wiped £4.9m off Kelvin’s stake in the com­pany, mean­ing that since Jan­uary his hold­ing has re­duced in value by £272.6m. Ex­perts said the ac­count­ing is­sue was un­likely to be hu­man er­ror, and more likely a prob­lem with the com­pany’s in­ven­tory soft­ware.

Ted Baker is due to re­lease a trad­ing update on De­cem­ber 11.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.