Fashion retailer Ted Baker is in talks to sell its London headquarters building, known as the ‘Ugly Brown Building,’ following a recent accounting scandal. The 78,920 sq ft building was purchased by the company in 2015 for £55.2 million as a safeguard against rising rents. However, due to an accounting error and poor trading during the Black Friday period, Ted Baker has decided to put the London HQ up for sale.
Reports suggest that a deal is currently being negotiated with the British Airways’ pension scheme, which owns a neighboring building. The potential agreement could involve either a stake in the building or a complete sale, providing Ted Baker with the opportunity to raise tens of millions of pounds. However, there is still a possibility that the sale may not go through.
This decision comes after Ted Baker recently revealed that its accounting shortfall was larger than initially estimated, totaling £58 million. This finding was backed by an independent review conducted by Deloitte, which examined the company’s stock inventory position. Over the past year, the retailer has faced numerous challenges, including profit warnings and a scandal involving its founder, Ray Kelvin, who faced accusations of inappropriate behavior.
Although Ted Baker has not released specific details about the accounting gap, in December, the company stated that it expects its pre-tax profit for the year ending on January 25, 2020, to be between £5 million and £10 million. In light of these difficulties, the retailer is now exploring ways to raise funds and stabilize its financial situation.