Fashion retailer Ted Baker said on Monday that it had overstated the value of the inventory on its balance sheet and will be carrying out a review of the issue.
The company, which was rocked last year by allegations of ‘forced hugging’ by founder Ray Kelvin, said it may have overstated its inventory by between £20m and £25m but that this will have “no cash impact and will relate to prior years”.
It has appointed independent law firm Freshfields Bruckhaus Deringer and will also be appointing independent accountants to undertake a comprehensive review of the issue. They will report to a sub-committee, chaired by independent director Sharon Baylay.
“All costs and fees associated with completing the independent review will be expensed in the period incurred and clearly identified as such,” it 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.”
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