Fashion brand Ted Baker’s shares tumbled on Monday as the City reacted to a backlash from staff over a “forced hugging culture” by founder and chief executive Ray Kelvin.
The shares tumbled 12.2p, or 223p, to 1603p after a petition, launched by an employee, accused Kelvin of inappropriate behaviour.
A retail analyst said: “If the situation escalates, Ray’s position could become untenable. It would be a massive blow for Ted.”
The business, which is expected to update the City on Thursday with its latest sales figures, said the chief executive greets many people with a hug, be it a shareholder, investor, supplier, partner, customer and colleague, and hugs are “absolutely not insisted upon”.
On Monday it appointed a clutch of independent non-executive directors to look into the matter and launched a “thorough and urgent” external investigation.
The petition had 2500 signatories this morning. It also claimed that young female staff had been asked to sit on Kelvin’s knee, cuddle him or let him massage their ears.
“The owner regularly makes sexual innuendos at staff,” the employees said. They demanded that harassment claims or similar be reported to an external body, independent from the HR in-house department.
Ted Baker, which opened its first store in Glasgow, now has more than 500 shops worldwide.
The company added: “While the claims made are entirely at odds with the values of our business and those of our chief executive, we take them very seriously and will ensure that a thorough independent investigation is carried out.”
Analysts expect downbeat figures from the retailer, given the woes of House of Fraser and tough High Street trading. Ted was owed £600,000 when HoF fell into administration in August.
“After a subdued first-half performance we do not expect much relief in quarter three, given unseasonably warm temperatures,” an analyst at Jefferies said.
