Ted Baker inventory overstatement more than double initial estimate

(Sharecast News) - Fashion retailer Ted Baker said on Wednesday that it had overstated the value of its inventory by more than twice what it originally estimated.
In December, the company said it may have overstated the value of inventory on its balance as at January 2019 by between £20m and £25m. However, a review by Deloitte - which has now been largely concluded - has shown that it was overstated by £58m.

Ted Baker reiterated that there would be no cash impact for the overstatement that related to prior years.

At 1025 GMT, the shares were down 5.9% at 300.20p.

Independent retail analyst Nick Bubb said: "The Ted Baker share price has tumbled even further recently, even though there has been no trading update since Christmas and today's announcement doesn't move the debate much further forward.

"As previously stated, however, the overstatement is a non-cash item and related to prior years. And long-suffering shareholders, including the former boss Ray Kelvin, may be relieved to hear that there are no plans for any further update until the time of the preliminary results in March."

CMC Markets analyst David Madden said: "The clothing company has issued a string of profit warnings recently, hence why the share price has taken a battering. The inventory issue adds weight to the argument the company doesn't have its affairs in order, so sentiment is likely to remain sour."