Ted Baker launches probe into CEO ‘hugs’

Chief Executive Ray Kelvin has been accused of giving unwanted hugs to employees and has temporarily stepped down amid claims of “further serious allegations” about his conduct.

The scandal has gained traction quickly, with the company’s share price dropping more than 20 percent within a week of the claims emerging, though the company had also reported a slight (0.2 percent) fall in group sales as the story broke.

The original allegation was made on 2 December when an anonymous employee launched a petition on the campaigning workers’ rights website www.organise.org.uk highlighting Kelvin’s apparent preference for hugging rather than a handshake.

Addressed to Ted Baker’s board, the petition text reads: “Put an end to forced ‘hugging’ by the CEO. It is part of a culture that leaves harassment unchallenged. Please set up a way of reporting harassment to an independent, external body—HR has done nothing with the reports of harassment to date. Directors who abuse their power should be held to account. Harassment at Ted Baker is well documented but wilfully [sic] ignored by those in charge. It’s time to break the silence.”

The following day (3 December), in response to a slew of negative media coverage, Ted Baker announced that it had appointed an independent committee of non-executive directors to look into the allegations and take “appropriate responses.” The committee will be chaired by Sharon Baylay, an executive coach who has served on the boards of Microsoft U.K. and the BBC and who joined Ted Baker as a non-executive in June.

On 6 December, the company appointed law firm Herbert Smith Freehills to conduct an independent investigation. A subsequent announcement on 7 December said the firm will present its findings to the committee.

David Bernstein, non-executive chairman, said in a statement: “The board has moved quickly to appoint Herbert Smith Freehills to conduct a thorough and independent external investigation into recent reports regarding the company and its CEO.”

“Ted Baker has been my life and soul for 30 years. I love this company and I care deeply for all my colleagues. It’s for that reason that I have decided to take a temporary leave of absence.”

Ray Kelvin, former Founder & CEO, Ted Baker

He added: “Ted Baker has great people across its global teams as well as a highly experienced operational board underpinned by the strength and experience of our teams, I am confident that the business remains in a strong position to continue to deliver its long-term growth strategy.”

The company has said that it will not make any further comment until the claims have been investigated, but a press spokesperson said it aimed for the investigation to be concluded as quickly as possible “and hopefully by the end of the first quarter next year.”

Lindsay Page, the company’s chief operating officer who has been with Ted Baker since 1997, has been appointed acting CEO with immediate effect.

The online petition currently has more than 100 recorded incidents of harassment. These include allegations that Kelvin asked female employees to sit on his knee, as well as claims that he massaged necks without permission.

Kelvin has said in a statement that the “accusations of the past week have raised some very serious and upsetting issues. It is only right that the board and HSF should investigate fully.”

He added: “Ted Baker has been my life and soul for 30 years. I love this company and I care deeply for all my colleagues. It’s for that reason that I have decided to take a temporary leave of absence.”

As the so-called “closest man to Ted,” Kelvin devised Ted Baker as a kind of alter-ego when he launched the company in 1988. And in a strange mix of trying to preserve his anonymity, as well as forge a mysterious personality to enhance the brand, Kelvin’s face is often obscured in photographs as he either hides behind walls, doors, or objects he holds up to disguise himself (akin to the portraits of Belgian surrealist artist, Rene Magritte). He still owns around a third of the company, which went public in 1997, which means that whatever the outcome of the investigation, it might prove difficult to oust him, replace him, or survive without him.

Nat Whalley, CEO of the Organise Website, however, welcomes the speed at which the company has reacted to the allegations.

“This is a huge victory for the staff campaigning for an end to harassment at Ted Baker,” says Whalley. “Ray Kelvin stepping away is a huge win: it means Ted Baker staff will get the proper independent external investigation they demanded through their Organise petition. Thanks to our pressure, everyone who’s seen or experienced harassment at Ted Baker will be heard and feel safe again at work.”