Ted Baker board branded ‘weak’ as chairman insists investigation into harassment complaints against its chief executive would be ‘impartial’
The board of Ted Baker was branded ‘weak’ as the chairman insisted an investigation into harassment complaints against its chief executive would be ‘impartial’.
A leading investor raised doubts about the ability of directors to stand up to Ray Kelvin – but also warned that the company would be rudderless without him.
With pressure mounting on bosses, the fashion chain will today unveil full details of the probe into Kelvin’s behaviour alongside a trading update which is expected to see it post disappointing sales.
Troubled times: A trading update from the fashion brand is expected to see it post disappointing sales
Chairman David Bernstein said it would be ‘professional, impartial and move at pace’.
Sharon Baylay, a former BBC and Microsoft executive who joined Ted Baker’s board in June, will oversee the inquiry into claims that Kelvin, 63, massaged, kissed, hugged or inappropriately touched members of staff. Ted Baker is understood to have recruited law firm Herbert Smith Freehills to lead the inquiry.
But one leading shareholder said that uncertainty was ‘a material problem’.
‘Ray Kelvin owns 35 per cent of the shares in the company, you have a pretty weak board and he is the driving creative force at the company,’ the investor told the BBC.
They added that sacking him would mean losing ‘the man who built the company into the success it is – and you have a potentially big seller of the shares, which will impact the share price’. With the future of Kelvin and former Football Association chairman Bernstein in doubt, analysts at HSBC warned of ‘uncertainty over leadership’.
An online petition claims Kelvin harassed staff with unwanted hugs and repeated sexual innuendo. He is said to have taken off his shirt in an open-plan office and been accused of shoving an executive against a wall because he was not invited to his wedding.
Shares plunged in the wake of the allegations, wiping out almost a quarter of the company’s value.
Investors are thought to be concerned the probe will result in Kelvin’s dismissal.
He founded Ted Baker in 1988 and is still involved in the day-to-day running. The retail veteran was awarded a CBE in 2011.
HSBC has downgraded its rating on the stock from ‘buy’ to ‘hold’, saying it was unclear when the situation will be resolved. It said Ted Baker is ‘fundamentally a good company’. But others feel the sell-off is an over-reaction.
Liberum said the impact of the claims on long-term prospects was likely to be minimal, believing it was still ‘a very strong buying opportunity’.
Laith Khalaf, senior analyst at Hargreaves Lansdown, added: ‘There’s probably brand damage but does that equate to what we’ve seen, which is a 25 per cent fall in the share price?’
One top-five shareholder said: ‘Ted Baker is a well-established global brand. The share price does not reflect the value of that, or the investment management has put into it. We remain supportive of the management.’
Shares closed 3.3 per cent, or 47p, higher at 1467p.