Ted Baker boss was given formal warning for shoving executive
The chief executive of fashion chain Ted Baker, who is facing multiple allegations of inappropriate behaviour towards staff, was handed a formal warning by his board following an incident in which he shoved a senior executive against a wall after learning he was not invited to the colleague’s wedding.
Ray Kelvin was sanctioned by directors following a confrontation in the fashion firm’s offices when he discovered that he had been invited only to the evening function following the wedding of two senior staff, rather than the ceremony.
An eyewitness told the Daily Telegraph, which first reported the incident, that Kelvin had summoned the groom-to-be, a longstanding senior executive, into a meeting room. The witness said: “People saw the shouting. People had to get Ray off him,” and that Kelvin had punched a table in anger.
The Guardian has now learned that the attack was reported to the board, which handed Kelvin a formal warning.
The company on Thursday insisted it was “business as usual” and that Kelvin would continue in his job, despite calling in lawyers to investigate allegations that he forced hugs and kisses on employees.
The company confirmed it had appointed the law firm Herbert Smith Freehills to conduct an independent external investigation into the harassment allegations. Lindsay Page, the firm’s chief operating officer, said no timetable had been set for the lawyers to report back.
Page was speaking as the firm, which was founded by Kelvin 30 years ago and has more than 500 outlets worldwide, announced disappointing trading over the last three months, including a 3% fall in sales at established stores.
“It’s an independent investigation,” said Page, indicating that Herbert Smith would be given as much time as required.
The firm will report to a committee of the non-executive directors, which will be chaired by Sharon Baylay, a former BBC Worldwide and Microsoft executive who joined Ted Baker’s board this summer.
The company’s share price has fallen sharply since Sunday, when the Observer published the allegations, which included “forced hugging”, making “sexual innuendos” and “stroking people’s necks”.
The decline has wiped £116m off the value of the company and cut the value of Kelvin’s 35% stake by more than £40m to £244m.
More than 300 former and current Ted Baker staff have now signed a petition objecting to the culture of “forced hugs” which they claimed was harassment.
Organise, the online campaigning platform which started the petition, said it had delivered more than 100 anonymised “reports of harassment” to the company’s board of directors.
The petition also accused Kelvin, 63, of “stroking people’s necks” and making “sexual innuendos”.
When the existence of the petition was first revealed the company said: “Ray greets many people he meets with a hug – be it a shareholder, investor, supplier, partner, customer or colleague.” It said the hugs were part of Ted Baker’s “culture” but “absolutely not insisted upon”.
Kelvin built the company from a single shirt shop in Glasgow and it now describes itself as a “global lifestyle brand”. However, the chief executive keeps a low profile, and has never been photographed without an object – such as a hat, shoe or ornament – partially covering his face.
On Thursday, shares recovered slightly, rising just over 4% on relief that trading had not been worse for Ted Baker during a period of unseasonably warm weather and tough trading conditions, which has affected fashion retailers across the high street.
Department stores are key outlets for Ted Baker products and there were fears sales would have been hit harder by the collapse and subsequent sale of House of Fraser and continuing problems at Debenhams. Ted Baker was owed £600,000 when House of Fraser went into administration.
Tom Stevenson, an investment director at Fidelity Personal Investing’s share dealing service, said Ted Baker was a “rare retail success story”, but he added: “Trading is not exactly front of mind for Ted Baker’s shareholders, but rather the ongoing investigation into the alleged inappropriate behaviour of the company’s founder and driving force, Ray Kelvin.”
He said: “Ted Baker illustrates the risks of investing in companies that are so closely associated with one person, however talented, especially when they own a third of the company. The shares have fallen so far so fast because investors fear that without Kelvin the company will be less able to counter the headwinds blowing through the beleaguered high street.”