Ted Baker thrives despite ‘Hug-gate’ probe into boss Ray Kelvin

Shoppers continued to swarm to Ted Baker over Christmas despite harassment allegations against its boss and founder Ray Kelvin, it emerged on Wednesday.

Finance director Lindsay Page, who has stepped up to acting chief executive after Kelvin took leave of absence in early December, said recent events had galvanised staff. “There has been a determination to show the world how good we are. Staff are very motivated. It’s business as usual,” Page added.

The fashion brand saw retail sales rise 12.2% for the five weeks to January 5, allaying fears that shoppers would shun the brand in protest. “We did well on outwear and knitwear,” said Page.

Shares, which had been hit over the past month as allegations of inappropriate behaviour towards staff emerged, rose 183p, or 11.3%, to 1799p.

“Not even the allegations seem to have diminished desire for the Ted Baker brand,” said Emily Salter, a retail analyst at GlobalData.

Ted Baker swiftly appointed a clutch of independent non-executive directors to look into the claims and launched a “thorough and urgent” external investigation, led by law firm Herbert Smith Freehills.

The retailer said today that the investigation is “progressing” and “a further update” will be made in due course.

Kelvin, who has been accused of kissing the necks and ears of employees and forcing hugs on staff, has kept a low profile since the claims emerged and has not commented on them. He set up the business in Glasgow in 1988.

“Recent claims against [Kelvin] create an overhang,” said Royal Bank of Canada’s Piral Dadhania adding that they “could lead to some corporate actions”, depending on the independent panel.

The company also completed the £20 million deal to bring No Ordinary Shoes — its footwear manufacturing business — back in house from Pentland Brands, which had been the retailer’s footwear licensee since 2001.