Fashion retailer Ted Baker said on Monday that it had overstated the value of the inventory on its balance sheet and will be carrying out a review of the issue.
The mix-up comes at the end of a challenging year for the company. In October, the retailer reported a £23m loss for the six months to 10th August, down from a profit of £24.5m a year ago.
Ted Baker has been rocked by the high-profile scandal of founder and former chief executive Ray Kelvin's departure following allegations of inappropriate behaviour and unwanted sexual advances in the workplace.
"It is clearly going to be an uncomfortable time for the business, unfortunately just at the point when it needs to be focused on Christmas sales and trying to make up for disappointing trading earlier this year".
"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.
Directors said they believe that any adjustment to the value of inventory will only relate to prior years and will have no cash impact.
In October, Page said the company had likely faced the most hard trading conditions that he could recall in 30 years after issuing its second profit alert in four months.
Ted Baker has appointed Freshfields Bruckhaus Deringer LLP and will be appointing independent accountants to undertake a comprehensive review of the inventory overstatement issue.
Even eCommerce sales - which have been a strong driver of growth at Ted Baker in recent years - dropped by 2.5% to £214.5 million. "Whilst the review is ongoing, the company will not comment further".
Under a section titled "Significant Issues", the company's audit committee said it had "received and reviewed reports from management and the external auditors setting out the significant issues in relation to the financial statements for the period which related to the carrying value of inventory and the carrying value of retail fixed assets (being leasehold improvements and fixtures and fittings)".
Kelvin took a voluntary leave of absence from his role as chief executive of Ted Baker in December previous year, after he was accused by the company's staff of forced "hugging" and inappropriate touching and comments.