On December 3rd, British fashion chain Ted Baker announced investigation against chief executive and founder Ray Kelvin relating to his habit of hugging business colleagues.
An online campaign claiming to represent over 200 employees has called on the company to end and “a culture that leaves harassment unchallenged”.
The claims are “entirely at odds” with Ted Baker’s values and those of Mr. Kelvin, the retailer said in a separate comment, confirming it had “very recently” been made aware of the petition.
Ted Baker said that an independent committee of non-executive directors had been appointed to ensure that the views and concerns mentioned in the petition are considered and appropriate responses are taken.
Kelvin, 62, raised the Ted Baker brand and has been chief executive since the beginning of the company’s life in 1988. Mr. Kelvin, who started representing the company in Glasgow 30 years ago, “greets many people he meets with a hug”, with shareholders, investors, suppliers, partners, customers or colleagues, potential recipients of the gesture, Ted Baker said.
“Hugs have become part of Ted Baker’s culture, but are absolutely not insisted upon,” he added.
“While the claims made are entirely at odds with the values of our business and those of our CEO, we take them very seriously and will ensure that a thorough independent investigation is carried out,” the company said.
The CEO is also accused of making sexual innuendos, stroking people’s necks and other forms of verbal or physical harassment.
Ted Baker’s shares fell 12.9 percent and it was the second largest loser on the FTSE 250 index. Shares of fashion designer and retailer Ted Baker lost about $165M, or a sixth of their value, as the company said. The slump in Ted Baker shares extended its year-to-date decline to about 42%.
Analysts have cut earnings estimates for the company after a slowdown in sales growth was blamed on unseasonable weather, Brexit risks and troubles faced by some trading partners such as department store chain House of Fraser.