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Fashion chain Ted Baker says its founder and chief executive, Ray Kelvin, has resigned following allegations of misconduct, including “forced hugging”.

Mr Kelvin had been on a voluntary leave of absence since December last year following the misconduct allegations.

These, which Mr Kelvin denies, are being investigated by the company.

In December, employees launched an online petition accusing him of inappropriate comments and behaviour.

The petition, on the workplace website Organise, said that more than 200 Ted Baker staff were finally breaking their silence after at least “50 recorded incidents of harassment” at the fashion group.

Staff claimed that as well as engaging them in unwelcome embraces, the brand’s founder had asked young female members of staff to sit on his knee, cuddle him or let him massage their ears.

At the time, Mr Kelvin said that it was “only right” that Ted Baker’s committee and board should investigate.

Mr Kelvin founded Ted Baker in 1988. It now has around 500 outlets in the UK and overseas.

Acting chief executive Lindsay Page will continue in the role and the board has asked David Bernstein to act as executive chairman to provide additional support.

Mr Bernstein has indicated that he will continue in this position until no later than 30 November 2020, by which time a successor will be appointed.

In a statement, Mr Bernstein said: “As founder and CEO, we are grateful for his [Ray Kelvin’s] tireless energy and vision.

“However, in light of the allegations made against him, Ray has decided that it is in the best interests of the company for him to resign so that the business can move forward under new leadership.”

Stockbrokers Liberum said the news was helpful to the company, describing the resignation as “unfortunate but understandable”.

It added there would be minimal disruption to the business, which had “a strong team”.

However, in morning trading on Monday following the announcement, the shares were down 4%.

Last week, the company issued a profit warning which saw its shares fall more sharply.

The retailer blamed currency movements, product costs and a writedown on unsold stock for the disappointment.

It said full-year profit for the year to 26 January would be about £63m, compared with forecasts of £73.8m. The firm’s shares were also hit late last year by the hugging controversy.

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