The struggling fashion retailer Ted Baker has found “another banana to slip on”, says Camilla Canocchi on This Is Money. The stock fell to a ten-year low this week after it admitted that it had overstated the value of its inventory by around £25m.
The group has called in lawyers and independent accountants to investigate the issue and says it has enough cash to “cushion the impact” on the balance sheet.
However, the company’s decision to bring in external investigators suggests that there may be more serious problems “bubbling under the surface”.
The latest revelations worsen what has already been a “torrid year” for a firm previously hailed as one of the “shining lights” of the high street, says Julia Kollewe in The Guardian. In March founder Ray Kelvin was forced to stand down after former and current staff complained about an alleged regime of “forced hugs” and harassment. The firm’s profits were hit by the £2m cost of an investigation and legal matters relating to the allegations. Since then the company has issued three profit warnings and dived to a first-half loss of £23m in October, its first in more than two decades.
The fact that Ted Baker’s share price “has unravelled faster than a snagged cardy”, falling more than 80% in nine months, increases speculation that Kelvin may be tempted to return with a “cut-price buyout bid”, says Ben Marlow in The Daily Telegraph. However, those betting on this outcome should be aware that every “fresh clanger” makes that “an even bigger leap of faith”.