Ted Baker’s shares plunged as much as 17% in early trading after it warned profits are expected to below market expectations.
The fashion retailer said profit before tax is now expected to be in the region of £63m, well below the £73.5m it reported during the same period last year.
Ted Baker added that the figure is also before the previously announced costs associated with the ongoing independent external investigation, exceptional costs relating to the previously announced debtor balances owed by House of Fraser and the acquisition of No Ordinary Shoes Limited.
It said profits had been “adversely affected” by three non-cash impacts including: Foreign exchange movements in the final week of the financial year, resulting in a profit impact of approximately £2.5m relating to the translation of inter-company balances.
It also blamed the recent systems and warehousing transitions in Asia and the US which led to an “unanticipated write-down in the value of inventory of approximately £5m”.
The news comes after Ted Baker launched an investigation into harassment allegations against its founder and CEO Ray Kelvin, after reports claimed he hugged workers and kissed their necks and ears. He is currently still on a leave of absence.