Ted Baker Founder Steps Aside as New Allegations Probed

(Bloomberg) -- Embattled Ted Baker Plc founder Ray Kelvin, under fire for giving unwanted hugs to employees, will take a leave of absence after company officials learned of “further serious allegations” regarding his conduct.

Kelvin will take a voluntary leave from his chief executive officer’s post while Herbert Smith Freehills LLP conducts its independent investigation, the company said in a statement. Ted Baker has also created a committee of non-executive directors to ensure an appropriate response to employee concerns.

Ted Baker’s board and the committee “have now been made aware of further serious allegations about the conduct of founder and Chief Executive Officer Ray Kelvin, which it will also be investigating,” the company said. The decisions were made “for the benefit of the business and the people who work in it.”

Kelvin has been under a microscope following reports that he gave staff members unwanted hugs and asked female employees to sit on his knee. The CEO also pushed an employee against a wall in a glass meeting room in 2016 while dozens of staffers looked on, according to three people who witnessed the incident and asked not to be named.

The CEO said he was stepping aside because the events of the past week have “raised some serious and upsetting issues” and he didn’t want to see harm to the retailer. “Ted Baker has been my life and soul for 30 years,” he said in a statement. “I love this company and I care deeply for all my colleagues.”

Online Petition

Complaints about Kelvin’s conduct originally surfaced in an online petition on the website Organise. Ted Baker was presented with new allegations of harassment on Friday, according to Usman Mohammed, Organise’s lead campaigner, without detailing the accusations.

Kelvin stepping aside means that “Ted Baker staff will get the proper independent external investigation they demanded,” Organise CEO Nat Whalley said in an emailed statement.

The uproar has prompted a plunge in the company’s shares that wiped away almost one-fifth of its value this week. That’s prompted speculation among analysts that one of the U.K.’s rare retail success stories of recent years could become vulnerable to a takeover, even though Kelvin owns about 35 percent.

“It’s not unreasonable to think that Ted Baker could be in play after the magnitude of the share price fall and the fact that it is a single proprietary brand,” says Clive Black, the head of research at Shore Capital.

Chief Operating Officer Lindsay Page will immediately begin serving as acting CEO in Kelvin’s absence, the company said.

©2018 Bloomberg L.P.