Ted Baker boss Ray Kelvin remained silent on a harassment probe as he updated the City on his company’s latest sales figures.
Founder and chief executive Mr Kelvin has been accused of enforcing a “hugging” culture at the fashion brand and of asking young female staff to sit on his knee and let him massage their ears.
Law firm Herbert Smith Freehills will now carry out an “independent external investigation”, findings of which will be reported to Ted Baker’s non-executive directors.
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The controversy, along with flagging sales, has sent Ted Baker’s shares plunging from £18.26 a week ago to £14.67 on Thursday.
Staff members last week set up a petition on campaign website Organise, accusing founder and chief executive Ray Kelvin of inappropriate language and behaviour.
The petition also accuses Mr Kelvin, 62, of making “sexual innuendos at staff” and “stroking people’s necks”.
Sales slipped 0.2 per cent in the 16 weeks to 1 December driven by a 6.5 per cent decline in wholesale revenues. Retail sales were up 2.3 per cent in the period.
Ted Baker blamed the disappointing performance on unseasonal weather in its key markets along with a challenging retail environment.
Mr Kelvin said: “We are pleased with the brand’s continued expansion, which is a reflection of the strength of the Ted Baker brand and the design and quality of our collections.
”The investment in our flexible business model ensures that the Ted customer has multiple channels to engage with the brand and underpins our long-term development.
“Our global e-commerce business continues to grow well and is complemented by our digital marketing strategy and unique stores that showcase the brand.”
Workers claim that the company has ignored complaints about harrassment.
Their petition alleges: “He took off his shirt on one occasion and talked about his sex life. So many people have left the business due to harassment, whether that be verbal, physical or sexual.”