Fashion retailer Ted Baker has recently disclosed that its inventory overstatement is now estimated to be £58m, significantly higher than the original projection of between £20m and £25m. This revelation, which is a non-cash issue and pertains to previous years, was made public in December by the company’s newly appointed finance chief.
The news comes as yet another blow to Ted Baker, which has already been grappling with a series of setbacks. Not only has the company been experiencing a slowdown in its sales, but it has also been dealing with the fallout from a scandal involving its founder and former CEO, Ray Kelvin. Following his resignation, there have been subsequent departures of the replacement CEO and executive chairman.
Adding to the company’s woes, Ted Baker’s market value has taken a massive hit, with its shares now trading at less than a tenth of their previous worth. This substantial decline has fueled speculation that Kelvin may consider taking the company private once again, in an attempt to regain control and stabilize its operations.
As Ted Baker continues to navigate these ongoing challenges, it remains to be seen how the fashion retailer will regain its footing and regain investor confidence.