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Ted Baker founder Ray Kelvin resigns as CEO after harassment claims

Last updated: 11:01 04 Mar 2019 GMT, First published: 07:24 04 Mar 2019 GMT

Ted Baker
Acting chief executive Lindsay Page has agreed to continue in the role

Ted Baker PLC (LON:TED) founder Ray Kelvin has stepped down as chief executive after taking a voluntary leave of absence following allegations of personal misconduct against him.

The retailer in December said it had appointed law firm Herbert Smith Freehills to conduct an independent investigation after about 300 former and current staff accused Kelvin of harassment, including “forced hugs” and ear kissing. Kelvin has denied the claims.

READ: Ted Baker issues profit warning as problems mount

Ted Baker said Kelvin has agreed to resign with immediate effect from his position as chief executive and as a director of the company.

Acting chief executive Lindsay Page has agreed to continue in the role and executive chairman, David Bernstein, will provide support.

Bernstein has also indicated he will remain executive chairman until no later than 30 November 2020.

Kelvin's resignation in 'best interests of the company', says chairman

"Ray Kelvin founded the business 32 years ago and has, together with the fantastic team around him, been the driving force behind it becoming the global brand it is today,” Bernstein said.

“As founder and CEO, we are grateful for his tireless energy and vision.

“However, in light of the allegations made against him, Ray has decided that it is in the best interests of the company for him to resign so that the business can move forward under new leadership.”

Ted Baker expects the investigation into personal misconduct allegations against Kelvin to be completed by the second quarter of 2019.  The probe will look at Ted Baker policies, procedures and handling of complaints.

Bernstein said: “As a board of directors, we are committed to ensuring that all employees feel respected and valued.

“We are determined to learn lessons from what has happened and from what our employees have told us and to ensure that, while the many positive and unique aspects of Ted's culture are maintained, appropriate changes are made."

Liberum expects minimal disruption from CEO departure

Analysts at Liberum said the resignation of Kelvin is "unfortunate but understandable". They repeated a 'buy' rating and target price on the shares of 1,892p, saying Kelvin leaves the business with a strong team.

"There should be minimal disruption, but we are encouraged that the board is providing additional support to the executive team," they said.

"Ted Baker has grown steadily and has become a global brand and we do not see any change to the group's long term prospects."

Last month the fashion group warned profits this year will be lower than expected due to stock write-downs, foreign exchange and additional product costs.

Profit before tax is now expected to be in the region of £63mln, but this is before another raft of one-off charges due to the Kelvin investigation, House of Fraser bad debts and the acquisition of No Ordinary Shoes.

In late morning trading, shares gained 4% to 1,968p. 

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