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Ted Baker vows swift investigation into 'forced hugging' claims

The Guardian logo The Guardian 05/12/2018 Rupert Neate
a store front at day: Ted Baker’s chairman said the investigation would be ‘professional, impartial and move at pace’. © Reuters Ted Baker’s chairman said the investigation would be ‘professional, impartial and move at pace’.

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A senior Ted Baker non-executive director will lead a “professional, impartial” and swift investigation into allegations that the company’s founder and chief executive, Ray Kelvin, forced hugs and kisses on employees.

Sharon Baylay, a former BBC Worldwide and Microsoft executive who joined Ted Baker’s board this summer, has been appointed to lead a “thorough and urgent” independent inquiry into Kelvin’s alleged behaviour.

David Bernstein, Ted Baker’s chairman, told the BBC that Baylay’s investigation would be “professional, impartial and move at pace”. The company said it would provide more details on Thursday, when it is due to update shareholders on the company’s performance.

The allegations, which include “forced hugging”, making “sexual innuendos” and “stroking people’s necks”, has resulted in the company’s share price falling by more than a fifth since the Observer published the claims on Sunday.

The collapse in the share price has wiped about £70m off Kelvin’s paper fortune, as he owns 35% of the company he founded in 1987. The shares fell sharply on Monday and Tuesday, but rebounded by more than 3% on Wednesday.

Kelvin was ranked as the 244th-wealthiest person in the Sunday Times 2018 rich list with a £522m fortune.

Fresh allegations were made against Kelvin on Wednesday, including a claim that he shoved an executive against the wall of a glass meeting room after not being invited to part of the employee’s wedding. The incident is said to have been witnessed by three people.

The allegations, which include “forced hugging”, making “sexual innuendos” and “stroking people’s necks”, has resulted in the company’s share price falling by more than a fifth. © getty The allegations, which include “forced hugging”, making “sexual innuendos” and “stroking people’s necks”, has resulted in the company’s share price falling by more than a fifth. In response to the shoving allegation, the company said: “We do not believe these reports are reflective of the organisation we have all worked hard to develop over the last 30 years. We are, though, taking them very seriously.”

Analysts at HSBC downgraded the company’s shares from buy to hold, warning that “uncertainty over leadership distracts from the core investment case” and there was “limited visibility as to when this will be resolved”. The City broker Stifel Financial also downgraded its rating on the stock from buy to hold, warning negative publicity could be particularly damaging to womenswear sales in the run-up to Christmas.

In a statement released in response to the original allegations on Monday, the company said: “Ray, and the company’s leadership, have always prided themselves on Ted Baker being a great employer and business to work with. Accordingly, they and the board take these concerns very seriously and the board has directed a thorough and urgent independent external investigation is carried out into these matters.”

The company said it would ensure the “views and concerns” that emerged from the investigation were “recognised and carefully considered and that appropriate responses are taken forward”.

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