Ted Baker drafts in consultants to review operations

Ted Baker Ray Kelvin AlixPartners
AlixPartners will be responsible for coming up with a turnaround strategy for Ted Baker
// Ted Baker hires AlixPartners consultancy to help with a root-and-branch review of its operations
// The retailer has issued 3 profit warnings this year
// The review is separate from the investigation into its £20m to £25m stock overstatement

Ted Baker has reportedly drafted in consultancy firm AlixPartners to support the root-and-branch review of its operations after a year which saw the retailer issue three profit warnings.

The review will analyse Ted Baker’s operations and is separate from the investigation into its £20 million to £25 million stock overstatement which was revealed earlier this week, Financial Times reported.

AlixPartners will be responsible for establishing a turnaround strategy, with a wider-ranging mandate to look at Ted Baker’s customer strategy, costs, supply chain and operations across departments.

READ MORE: Ted Baker reveals £25m stock overstatement

The fashion retailer revealed cost-saving initiatives and improved procurement capability at the time of its half-year results in October.

Ted Baker recorded a £23 million loss before tax in the first half of its financial year due to “very difficult trading conditions”.

In relation to its stock overstatement, Ted Baker appointed law firm Freshfields Bruckhaus Deringer and forensic accountants to investigate the matter earlier this week.

However, it had already warned on profits three times prior to that.

The first alert came in February, when it said a £5 million stock write-down, costs associated with IT and warehouse transition and currency movements would result in profits falling short for the year to February 2019.

In June, the retailer said increased discounting had resulted in sales and margins sliding, prompting analysts to cut forecasts by around a quarter.

Ted Baker founder Ray Kelvin resigned as chief executive in March after allegations of inappropriate conduct towards staff.

He has denied the allegations, which were the subject of a separate investigation by another law firm.

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