Yahoo Finance The long rise and rapid fall of Ted Baker founder Ray Kelvin
The resignation of Ted Baker’s (TED.L) founder Ray Kelvin over harassment allegations brings to an end more than three decades at the helm of the British fashion brand.
The 63-year-old oversaw the rise of the firm from a single store in Glasgow to a global brand with more than 500 shops and concessions worldwide.
The London-born entrepreneur came up with the idea for the store on a fishing trip in his 20s, specialising in shirts when his first shop opened in Scotland in 1988.
Its quirky shirts and suits at high street prices made the firm stand out, as well as the wholly fictional alter ego used by Kelvin for the brand – Ted Baker.
The company launched its first London store in 1990, moved into wholesale supply in 1994 and went public in 1997, becoming a household name.
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By the early 2000s it had gone global, with stores across the USA, Australia and New Zealand, and it earned itself Superbrand status in 2008.
But the company was already facing one of its toughest years yet in 2018 when the scandal first broke which would bring Kelvin’s reign to an end.
In Kelvin’s 30th year, it was hit by lower consumer spending and reported lower sales in its wholesale arm. Ted Baker looked unable to avoid the same pressures hitting most high street retailers with bricks-and-mortar stores.
The seismic moment for Kelvin came in December 2018, when an online petition surfaced accusing the charismatic founder of harassment.
The petition’s organisers, who said they worked at the firm, accused Kelvin of “forced hugging,” and said harassment of employees was “well documented but wilfully ignored.”
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“I’ve seen the CEO ask young female members of staff to sit on his knee, cuddle him, or let him massage their ears,” the petition claimed. HR staff are said to have replied that it was “just what Ray’s like.”
Kelvin strongly denied the allegations then, and the company’s statement today makes clear he still does now.
A probe into Kelvin’s conduct will continue despite his exit, and will shine more light on what really happened when it reports at some point in the first half of this year.
But the announcement of the resignation of the company’s founder, with immediate effect, suggests the scale of the damage that has already been done to his reputation as a giant of British retail.
Acting executive chairman David Bernstein said Kelvin had decided it would be “in the best interests” of the company for him to go.
Only time will tell how the departure will affect Ted Baker’s future. The company had a strong Christmas in 2018 despite the allegations, reporting “business as usual,” and some analysts say sales trends suggest it will ride out the scandal.
But the firm issued a profit warning last week, and as Russ Mould, investment director at AJ Bell, points out: “It is not yet clear what lasting damage the episode has done to the Ted Baker brand and, for another, Kelvin himself has been inextricably linked with the development of said brand.
“Shareholders may legitimately ask what is Ted Baker without him?”
