Ask almost anyone who has met Ray Kelvin, the founder and boss of Ted Baker, and it is more than likely they will have a story about being hugged.
City analysts, journalists, staff, suppliers and bankers alike tell of the snappily dressed chief executive taking them in swift embraces or long and intense bear hugs, planting kisses or even demanding press-ups.
But this week Ted Baker removed the “hug zone” – a demarcated area outside Kelvin’s office – after more than 300 current and former staff signing a petition on the Organise campaigning platform calling for an end to “forced hugs” and alleged harassment by Kelvin.
The company called in City lawyers to investigate and began an overhaul of its culture.
But on Friday afternoon, just three minutes before the stock market closed for the week, that overhaul moved into overdrive. The company issued a statement to say it had received “further serious allegations” and that Kelvin would now take a leave of absence until the investigation was concluded.
Staff of both sexes have complained not just of unwanted hugs but have accused Kelvin of ear kissing, shoulder massages and asking young female members of staff to sit on his knee.
The campaigning group says it has sent more than 100 anonymised reports of alleged harassment to the Ted Baker board of directors.
Until last weekend, when the Observer reported the allegations of harassment, Kelvin’s hugs were just seen as part of a quirky culture at Ted Baker’s London head office, called the Ugly Brown Building. It was a working environment which the snappily dressed Kelvin has described as part of “caring and loving people, and making sure while they’re in the business they have a good time and they enjoy it”.
“Hug them,” he once told trade journal Retail Week “It’s not hard.”
But a darker side to the Ted Baker culture has now emerged. Retail Week has reported occasions when hugs turned into an unwanted sit on the knee or a hand around the waist allegedly drifting downwards.
When the allegations were put to Kelvin by one of the magazine’s reporters he responded: “If they are happy to sit on my knee …” before trailing off.
Several members of staff have also described Kelvin’s “fits of rage” including one incident in which he pushed a senior executive against a wall after learning he was not invited to their wedding ceremony. As the Guardian reported on Thursday, Kelvin was handed a formal warning by the Ted Baker board of directors following the incident.
The company has called in law firm Herbert Smith Freehills to carry out the independent investigation into the allegations, which have seen 16% off the share price since Monday. The decline has wiped £134m off the value of the firm and £47m off the value of Kelvin’s 35% stake. His shares are now worth some £238m.
That sharp fall has been driven partly driven by fears that Kelvin, whose personality and ideas underpin the business, might decide to leave or be forced out.
Emily Salter, retail analyst at GlobalData: “Kelvin’s position in the company is no longer assured, putting the brand in a dangerous position given that its success is so reliant on its founder.”
While there are about 400 staff at the group’s head office, led by Kelvin’s right hand man of more than two decades Lindsay Page, industry insiders and former staff say that Kelvin is still at the centre of decision-making.
“He is very hands-on and sticks his nose into everything,” says one industry veteran, who knows the company well.
Kelvin himself has admitted as much: “I can be difficult. I am particular and I can be hard work when I need to be. But I think that’s respected.”
The north Londoner, who will turn 63 next week, has fashion in his bones. His father Alf owned a small blouse factory in Tottenham, he began working alongside his mum Trudie in the family tailor’s shop from as young as nine.
She continued to be a major influence on his life, working in Ted Baker stores up until her death in 2011.
Kelvin began his business life by supplying womenswear to high street retailers in the early 1970s via his Personal Contact company, before seeing an opportunity to specialise in men’s shirts. With the backing of Scottish department store empire A Goldberg & Sons, he began with one 700 sq ft store in Glasgow stuffed with 400 types of shirt.
Kelvin has said he invented his Gatsbyesque alter ego, Ted Baker, as a way to separate himself from the brand – just in case it went bust.
“The man closest to Ted”, as Kelvin is described in the company’s annual report and accounts, has kept a remarkably low profile in the world of fashion retail, where it’s not uncommon for bosses to be regular fixtures of diary columns or even front pages. That’s despite the fact that first wife Georgia Slowe, with whom he had two sons, now in their 20s, was an actress in Emmerdale. He married second wife Clare, with whom he has a daughter, in 2012.
Kelvin has spoken out against his hatred of being seen to be flash and has rarely been photographed without a prop, like a hat or shoe, placed half across his face.
The brand blossomed during the 1990s era of lad culture, with “vomit proof suits” complete with special pockets to store condoms. The company, which listed on the stock market in 1997, now has 544 stores worldwide and annual sales of £590m.
Kelvin likes to promote from within and a number of senior staff have spent more than 20 years at the company. He talks about staff as like family, and has been known to help pay for education or medical treatments.
But in the past year, several senior people have left the business including retail director Chris Browne and womenswear boss Catherine Scorey.
One friend says the atmosphere has changed amid tougher times on the high street. “He’s been allowed to do whatever he wants to do. Perhaps he’s lost a bit of his moral compass in recent years and doesn’t realise not everybody wants to be hugged by their boss.”
On Friday night, after taking his leave of absence, Kelvin was sounding contrite. In a statement, he said the accusations being made by current and former staff were “very serious and upsetting” and that it was “only right” they should be investigated.
He added: “Ted Baker has been my life and soul for 30 years. I love this company and I care deeply for all my colleagues. Ted Baker means everything to me and I can’t bear to see it harmed in any way.”