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Ted Baker outlines ‘hugging’ probe as revenue falls

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Ted Baker has appointed a law firm to carry out an independent investigation into allegations of “forced hugs” against its boss.

The fashion chain said Herbert Smith Freehills would conduct the inquiry, which would report to a committee of its non-executive directors led by Sharon Baylay.

The harassment allegations made against chief executive Ray Kelvin also include asking young female staff to sit on his knee, cuddle him or let him massage their ears.

Ted Baker denied there was a culture of 'forced hugs' at the firm
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Ted Baker says it is investigating the allegations against CEO Ray Kelvin

The embattled company’s share price has fallen by a quarter since the claims emerged at the weekend in an online petition, claiming to be backed by more than 200 current or former employees, which called on the company to end “a culture that leaves harassment unchallenged”.

Ted Baker announced details of its inquiry while giving a scheduled trading update for the 16 weeks to 1 December which showed a fall in overall sales.

It said a 6.5% drop in wholesale division revenue, likely a consequence of the collapse of House of Fraser, was largely offset by a 2.3% increase in retail sales.

Total revenue slipped by 0.2%, it reported. The trading statement described the figures as a “resilient performance”.

It said pressures included unseasonably warm weather and the wider challenges in the retail market that have seen shoppers watch their spending because of Brexit uncertainty.

Shares gained back some ground in early trading following the update – rising 2%.

Commenting on the sales figures 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.”

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