Ted Baker Confirms Law Firm Will Investigate Reports on CEO
(Bloomberg) -- Ted Baker Plc said it appointed the law firm Herbert Smith Freehills LLP to conduct an independent external investigation into reports on the office conduct of founder Ray Kelvin.
The firm will report to a committee of the company’s non-executive directors that will be chaired by Sharon Baylay, a former Microsoft executive who joined the board in June, Ted Baker said in a statement Thursday. Bloomberg reported Wednesday the hiring of the law firm.
The appointment follows reports that Kelvin, who’s also chief executive officer, gave staff members unwanted hugs and asked female employees to sit on his knee. The CEO also pushed an executive against the wall in a glass meeting room in 2016, according to three people who witnessed the incident and asked not to be named.
The shares rose as much as 4.3 percent after the company said Thursday that total retail sales including e-commerce rose 2.3 percent in the 16 weeks through Dec. 1. The shares had slumped by about one-fifth this week since reports of Kelvin’s behavior appeared, casting a cloud over a British retail success story with 544 stores worldwide.
The company said it continues to anticipate mid- to high-single-digit wholesale sales growth in constant-currency terms for the full year.
The “robust” performance shows the resilience of Ted Baker’s business model, Liberum analyst Adam Tomlinson said in a note, where he reiterated that the company “could look increasingly attractive to an acquirer” if the current low valuation continues.
Kelvin is the largest shareholder in Ted Baker, with a stake of about 35 percent. The brand has grown from about 20 million pounds ($25.5 million) in sales in 1997, when the stock began trading, to 592 million pounds in the latest financial year.
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