Ted Baker CEO Ray Kelvin resigns

Ray Kelvin, the founder and chief executive officer of Ted Baker, has resigned with immediate effect

His resignation follows allegations of misconduct, including claims of a "forced hugging" culture at the fashion retailer, which he denies.

Kelvin took a voluntary leave of absence from his role as CEO back in December after the allegations were made against him. Since then, an internal independent committee has been investigating the allegations.

The company said on Monday that acting CEO Lindsay Page has agreed to stay on in her role. In addition, the board has asked David Bernstein to act as executive chairman.

Ted Baker said the investigation will continue, focusing mainly on the company's policies, procedures and handling of complaints. Herbert Smith Freehills, the law firm commissioned by the independent committee, is expected to have concluded the investigation by the end of the first quarter or start of the second.

David Bernstein said: "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. 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.

"As a board of directors, we are committed to ensuring that 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. Sharon Baylay has agreed to act as the designated non-executive director for engagement with the Ted workforce. Led by Lindsay, we are confident that the strong and experienced team we have in place will build the Ted culture and move the business forward."

In December, staff at the fashion group launched an online petition accusing Kelvin of inappropriate behaviour, including a culture of forced hugging, among other things. Staff at the company claimed that harassment was being left unchallenged and called on the group to set up a way of reporting any claims to an independent, external body.

Liberum said Kelvin's resignation is "unfortunate but understandable".

"He 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. 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."

Russ Mould, investment director at AJ Bell, said: "The news that acting chief executive Lindsay Page and executive chairman David Bernstein will remain in their roles provides a measure of stability, but if no permanent successor to Bernstein were to be appointed until the November 2020 deadline outlined today, or even close to that date, it would rather leave the business in limbo."