British fashion retailer Ted Baker said it may have overstated inventory by as much as £25 million (€29 million) and appointed an independent law firm to take stock of unsold goods, kicking its shares to their lowest in a decade.

Monday's announcement comes at the busiest time of year for retailers and exactly a year after a misconduct scandal that forced founder Ray Kelvin to step down as chief executive officer. Finance chief Lindsay Page took over as chief executive.

Shares in the company, which were booted out of Britain’s mid-cap index earlier this year, tumbled 15 per cent, extending a 74 per cent plunge so far in 2019 and heading for their steepest yearly fall on record.

"It [inventory issue] suggests that the business hasn't got a grip on its numbers which is a bit worrying considering that new chief executive used to be the finance director," AJ Bell investment director Russ Mould said. – Reuters