Ted Baker has appointed Deloitte to work alongside law firm Freshfields on the investigation into the overstated the value of stock on its balance sheet.

The business drafted in the accountant after revealing that it had overstated the value of stock by  £20m to £25m.

The fashion retailer said the valuation was based on preliminary analysis but “any adjustment to inventory value will have no cash impact and will relate to prior years”.

The big four accountancy firm has been appointed despite KPMG acting as Ted Baker’s auditor since 2002.

The probe into Ted Baker’s stock overstatement follows Ted Baker drafting in AlixPartners for a strategic review of the struggling fashion retailer, which swung to a loss of £23m in the 28 weeks to August 10, last week.

AlixPartners will come up with a turnaround strategy for Ted Baker, and will also look at its customer strategy, cost base, supply chains and cross departmental operations.

Separately, Ted Baker has appointed headhunter firm Korn Ferry to find a successor for chair David Bernstein, according to The Times.

Bernstein has been on the board since 2003 and became chair in 2013. He appointed current chief executive Lindsay Page, who was finance director when the stock valuation overstatement took place.

Since the departure of founder Ray Kelvin last year following allegations of inappropriate conduct, Ted Baker’s once-stellar performance has languished as the business has issued three profit warnings.

The search for Bernstein’s replacement will be overseen by non-executive director Sharon Baylay, who is separately overseeing the committee running the probe into the retailer’s stock overstatement.