Ted Baker PLC (LON:TED) has launched an independent external investigation into claims that there is a culture of “forced hugging” and inappropriate behaviour at the British fashion retailer.
A petition launched by Ted Baker staff, which has over 2,000 signatures, accuses the firm’s founder and boss, Ray Kelvin, of inappropriate comments and behaviour amid a company culture that “leaves harassment unchallenged.”
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The fashion group, which issues a trading update on Thursday, says hugs are "part of Ted Baker's culture, but are absolutely not insisted upon".
The company, which opened its first store in Glasgow in 1988 and now has 544 outlets worldwide, said Kelvin greeted many people with a hug, "be it a shareholder, investor, supplier, partner, customer or colleague".
Ted Baker employees also allege the brand's founder regularly uses sexual innuendo and asked young female members of staff to sit on his knee and cuddle him, according to UK press reports.
Shares in the fashion firm were 13.9% down at 1,573.0p in early afternoon trade.
“Ray, and the company's leadership, have always prided themselves on Ted Baker being a great employer and business to work with. Accordingly, they and the board take these concerns very seriously and the board has directed a thorough and urgent independent external investigation is carried out into these matters,” Ted Baker said in a statement on Monday.
“An independent committee of the non-executive directors has been appointed to ensure that the views and concerns are recognised and carefully considered and that appropriate responses are taken forward.”