Ted Baker boss Ray Kelvin is taking voluntary leave of absence after lawyers began an investigation into a culture of “forced hugging” at the company.
The probe is looking into Mr Kelvin’s conduct amid claims of harassment – and Ted Baker has said “further serious allegations” have come to light.
Hundreds of staff at the fashion brand have signed a petition calling on the company to end “a culture that leaves harassment unchallenged”.
Employees have accused Mr Kelvin of enforcing a “hugging” culture, making young female staff sit on his knee and asking them to let him massage their ears.
On Thursday it was revealed that the company had dismantled a “hug zone” in its London offices which had been identified by a sign next to Mr Kelvin’s desk.
The chief executive will remain on leave until allegations have been fully investigated, with chief operating officer Lindsay Page stepping up to the top job on a temporary basis.
Nat Whalley, chief executive of Organise, the group that co-ordinated the petition, described the probe as a “huge victory”.
She said: “Thanks to our pressure, everyone who’s seen or experienced harassment at Ted Baker will be heard and feel safe again at work.”
David Bernstein, non-executive chair, said the board had moved quickly to appoint lawyers “to conduct a thorough and independent external investigation”.
Shares in the company fell 1.2 per cent on Friday and are down 19 per cent since news of the allegations broke last week.
In an update to the stock market on Thursday, the company revealed it sales slipped 0.2 per cent in the latest quarter, driven by a 6.5 per cent decline in wholesale revenues.
