Ted Baker’s Latest Blow Pushes Stock Toward U.K.’s Worst of 2019

(Bloomberg) --

Yet another setback for Ted Baker Plc means the clothier's shares are heading for their worst year on record and have cemented their position among the U.K.'s worst-performing stocks of 2019.

The stock tumbled as much as 15% on Monday after the company said it's hiring a law firm and independent accountants to review an overstatement of unsold goods. That took its decline this year to 76%, the FTSE All-Share Index's sixth-worst performing member in a list that's anchored by Metro Bank Plc and Sirius Minerals Plc. Those stocks have slumped 89% and 81%, respectively in 2019.

Ted Baker shares have been in a downward spiral since last December, when reports first surfaced that founder Ray Kelvin gave employees unwanted hugs, allegations that were followed by his resignation as chief executive officer. Since then, the London-based company has reported a slump in first-half earnings and warned of a possible drop in second-half sales.

Monday's announcement is “less than ideal,” Liberum analysts including Adam Tomlinson wrote in a note. “We keep our recommendation under review as there are further moving parts that may need consideration, which naturally lead to some additional questions,” they said.

The stock did at least quickly recoup most of Monday's losses, trading down just 2.7% at 9:20 a.m. in London.

Ted Baker is scheduled to provide a quarterly sales update on Dec. 11.

To contact the reporter on this story: Lisa Pham in London at lpham14@bloomberg.net

To contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, Paul Jarvis

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