2nd Dec 2019 09:09
(Alliance News) - Ted Baker PLC said Monday it had overstated its stock by GBP25 million but reassured that any adjustment to inventory would have "no cash impact and will relate to prior years."
Shares in the struggling clothing retailer were down 3.0% at 385.60 pence each in London on Monday morning.
The London-based company predicts a hit of between GBP20 million to GBP25 million from the inventory overstatement, based upon preliminary analysis.
Ted Baker has appointed Freshfields Bruckhaus Deringer LLP and will be appointing independent accountants to undertake a comprehensive review of the inventory overstatement issue.
"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.
Ted Baker is slated to release a trading update for the 17 week period to December 7 from August 11 on Wednesday next week.
The company in October chopped its interim dividend as it swung to a loss amid weak trading conditions in the retail market.
In the six months to August 10, the company's revenue slipped 0.7% year-on-year to GBP303.8 million from GBP306.0 million. Ted Baker slumped to a pretax loss of GBP23.0 million from a GBP24.5 million profit, on higher costs and exceptional items.
Total first half retail sales fell 2.5% year-on-year to GBP214.5 million from GBP220.1 million, with in-stores sales down 2.9% year-on-year and online sales slipping 1.3%.
The retailer cut its first half payout by 56% to 7.8p per share from 17.9p.
The poor interim performance was a further blow to the company which has endured boardroom turbulence in recent months. Its founder, Ray Kelvin, resigned as chief executive earlier this year after allegations of misconduct were made against him.
Kelvin took a voluntary leave of absence from his role as chief executive of Ted Baker in December last year, after he was accused by the company's staff of forced "hugging" and inappropriate touching and comments.
By Tapan Panchal; [email protected]
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