Ted Baker has revealed its profits have been overstated by £25m.
The company’s board estimated the value of inventory on its balance sheet was overstated by £20m to £25m, according to a “preliminary analysis”.
It added that any adjustment to inventory value would have “no cash impact”, and would instead relate to prior years.
In a statement published today, the company also announced that it has hired Freshfields Bruckhaus Deringer to act as independent accountants and carry out a “comprehensive review” of the overstatement.
The firm will report to a sub-committee chaired by independent director Sharon Baylay.
Ted Baker said: “All costs and fees associated with completing the independent review will be expensed in the period incurred and clearly identified as such.”
It added: “Ted Baker is committed to ensuring the independent review is completed in an efficient and transparent manner and will update the market as appropriate.”
The fashion retailer said it will “not comment further” whilst the review is undertaken.
The company will still announce its scheduled trading update on Wednesday 11 December.