Shares in Ted Baker have hit a three-year low after the fashion retailer confirmed it would conduct an external investigation around allegations of harassment.
The London-listed retailer saw its shares plummet by as much as 15.4 per cent early this morning after a petition emerged over the weekend calling on Ted Baker to “end harassment”.
The petition accused founder Ray Kelvin of making staff “uncomfortable” by allegedly enforcing a “hugging” culture on colleagues, as well as asking young female staff to “sit on his knee, cuddle him, or let him massage their ears”.
The petition, signed by over 1000 current and former staff members, called for new procedures to be brought in allowing staff to report harassment to an “independent, external body”.
In a statement released today, Ted Baker promised an external investigation would take place at the request of the board.
A committee of non-executive directors has also been appointed to formulate a response to the allegations.
“While the claims made are entirely at odds with the values of our business and those of our CEO, we take them very seriously,” the retailer said.
“Ray greets many people he meets with a hug – be it a shareholder, investor, supplier, partner, customer or colleague.
“Hugs have become part of Ted Baker’s culture, but are absolutely not insisted upon.”
Shares in Ted Baker have since recovered a bit but were still down 13 per cent at 1,588p by lunchtime.
The news comes ahead of Ted Baker’s third quarter figures later this week, which analysts are predicting will show little relief “after a subdued first-half performance”.
Sales are expected to have grown five per cent, down from the eight per cent growth seen in the same period last year.
The petition which sparked the furore was published by online campaign platform Organise.
The website said 100 Ted Baker staff have submitted stories of harassment.
Organise also accused the retailer’s HR department of “willfully ignoring” complaints of harassment made by staff.