Ted Baker has warned investors that it may have overstated the value of its inventory by up to £25m.
The retailer has appointed Freshfields Druckhaus Deringer to investigate the issues, but has said the error will have “no cash impact” and would relate to prior years.
Freshfields Druckhaus Deringer will appoint independent accountants to undertake a comprehensive review of the issue.
They will report to a sub-committee chaired by independent director Sharon Baylay.
Ted Baker has swung to a loss before tax of £23m for the 28 weeks to 10 August 2019, from a profit of £24.5m during the same period in 2018, in what it described as a “challenging half”.
The business said the period was “characterised by unprecedented levels of promotional activity” and ”heightened levels of consumer uncertainty”.