Ted Baker CEO's Alleged Impropriety Includes Shoving

(Bloomberg) -- Ted Baker Plc founder Ray Kelvin's alleged transgressions extend beyond accusations that he gave staff members unwanted hugs, with former employees citing a new allegation about his abuse of power.

In 2016, Kelvin pushed an executive against the wall in a glass meeting room twice before another employee intervened to separate the men, according to three people who witnessed the incident. The aggression occurred in front of dozens of employees at the company's open-plan London headquarters, after the founder got angry that the employee had not invited him to part of his wedding, the people said.

Ted Baker said Kelvin, who's also the chief executive officer, was unavailable to comment on the latest allegations and efforts to reach him by email were unsuccessful. The Telegraph and other newspapers earlier Wednesday reported on the alleged altercation with the male employee, who left the company.

“We do not believe these reports are reflective of the organization we have all worked hard to develop over the last 30 years,” the retailer said in a statement referring to reports of the alleged shoving. “We are, though, taking them very seriously.”

Employees have alleged in an online petition and news reports that Kelvin hugged staff members inappropriately and asked female workers to sit on his knee. The company has described hugs as “part of Ted Baker's culture” but announced an external investigation and appointed a committee of non-executive directors to review its findings.

Law Firm

Herbert Smith Freehills, a multinational law firm headquartered in London, has been appointed to carry out the inquiry, according to people familiar with the matter. A representative didn't immediately return a request for comment.

The accusations against Kelvin have cast a cloud over a British retail success story with 544 stores worldwide, including 129 in North America. The shares have slumped by about one-fifth since reports of Kelvin's hugging appeared over the weekend, though they bounced back 3.3 percent Wednesday.

Kelvin is the founder and largest shareholder in Ted Baker, with a stake of about 35 percent. The brand has grown from about 20 million pounds ($25.5 million) in sales in 1997, when the stock began trading, to 592 million pounds in the latest financial year.

Even before the reports about Kelvin's workplace behavior, Ted Baker was under pressure from the growth of e-commerce. The shares fell by about one-third this year before this week's nosedive. The company is set to provide a sales update Thursday.

--With assistance from Suzi Ring and David Hellier.

To contact the reporter on this story: William Mathis in London at wmathis2@bloomberg.net

To contact the editor responsible for this story: Eric Pfanner at epfanner1@bloomberg.net

©2018 Bloomberg L.P.