What is happening with Ted Baker?

New York – Shares at Ted Baker Plc. have fallen more than 20 percent in recent weeks, weighed down by a trickle of accusations of harassment towards the executive director of the British fashion company. We analyse what is happening in Ted Baker.

Ted Baker Plc announced last week the temporary suspension of its CEO and founder – Ray Kelvin -attributions. The reason given by the company is the ongoing investigation of the allegations of harassment filed against him. "The committee and the council are now aware of a large number of serious accusations against Kelvin's behaviour, which will also be investigated," the company said in a statement.

As stated in a letter to shareholders and investors, the company will not make public the details of these accusations. Additionally, the fashion firm has assigned independent external research to the firm Herbert Smith Freehills LLP, according to British media. The firm will be responsible for communicating the results of its investigations to a committee of non-executive directors of the company.

Meanwhile, the fashion retailer has explained that there are "solid procedures" in place to allow employees to file complaints, including a confidential contact line.

Workers of Ted Baker demand to end forced hugs and inappropriate comments

Over the past month, an online campaign signed by 200 employees of Ted Baker called for an end to the controversial obligation of "forced hugs" and "a culture that does not oppose harassment." The petition, which includes anonymous testimony, asks Ted baker’s Board of Directors to improve the processes against harassment and eliminate the practice of "forced hugs."

Frustrated that the current Department of Human Resources "does nothing", although the cases of harassment "are well documented", the staff that has joined the online campaign asks the council to enable an effective system of processing such complaints. The employees explain that "there are many positive things about working with Ted Baker", but regret that they are "overshadowed" by the "hugs" and inappropriate comments, which have led many colleagues to leave the company.

The initiative - developed through the Organise platform - comes in addition to a series of reports revealing that Kelvin gave unwanted hugs to staff members and asked the employees to sit on his legs.

This is not the first time that Kelvin is involved in a similar situation; the executive director had allegedly pushed a manager against the wall in a boardroom in 2016, as indicated by three eyewitnesses who have requested to remain unnamed.

Ted Baker's operations director will replace the CEO for the duration of the investigation

Last Friday, December 7, the company announced that Ray Kelvin "accepted to leave the position voluntarily for the benefit of the business and the people who work there while the investigations are being carried out."

The Director of Operations, Lindsay Page, has been appointed as interim CEO with immediate effect, replacing Ray Kelvin for the time being during the investigation into his supposedly dubious behaviour.

In addition to announcing the appointment of Page, the company pointed out that the "investigative committee of the accusations" and the shareholders' meeting have been informed of more serious allegations about the behaviour of Ray Kelvin, which will also be investigated.

Ted Baker also announced that they have formed an independent committee "so that the views and concerns of certain media reports and a petition are recognised and considered carefully so that they have appropriate responses."

Ted Baker Plc. falls 20 percent on the Stock Exchange

After knowing these reports, the company's shares have fallen more than 20 percent over the past couple of weeks. "I think it's good that Kelvin goes out for a while from the company," explained an investor to the BBC. In a similar line, Jefferies analysts said in their latest report that "ending the culture of hugs is positive" for the firm.

Founded in the seventies by Ray Kelvin himself, Ted Baker plc. is listed on the London FTSE-250 stock index. Ray currently controls 35 percent of the group, which has 544 points of sale around the world. His personal fortune is valued at 552 million pounds according to data collected by 'The Sunday Times'.

The company will present financial results this week.

Imagen:Ted Baker UK e-commerce site