(Reuters) - British fashion retailer Ted Baker named a company veteran as its boss on Thursday, also introducing changes to workplace standards as it looked to draw a line under misconduct allegations against founder and outgoing CEO Ray Kelvin.
Ted Baker said interim head Lindsay Page, who joined as finance director in 1997, would take over as chief executive officer with immediate effect.
Kelvin, who had been CEO since the company’s launch in 1988, resigned last month over claims he presided over a culture of “forced hugging”.
The company said an independent panel had ended its investigation into the allegations involving Kelvin and recommended changes to the workplace culture - including a review of HR procedures and a whistleblowers’ hotline - which it would implement.
It said it would not comment on the claims against Kelvin, who has denied all allegations of misconduct.
He remains the company’s biggest shareholder with just under 35 percent, according to Refinitiv Eikon data.
Ted Baker’s stock fell 43 percent in value in 2018, and last month it reported its first drop in annual profit since the 2008 financial crisis, highlighting the tough conditions on Britain’s high streets.
Its shares rose 2.2 percent to 1,521 pence after Thursday’s statement.
“The appointment of Lindsay Page as CEO and the conclusion of the HSF investigation should now draw a line in the sand in what has been an unfortunate process,” Liberum analysts said.
“His (Page’s) appointment makes imminent sense and represents the smoothest of all transitions to a person that has (an) incredibly long pedigree at Ted Baker.”
Retailers are facing a perfect storm of rising costs, slowing growth and the hit to uncertainty spurred by Britain’s chaotic departure from the European Union.
Ted Baker, which opened its first store in Glasgow in 1988 and now has more than 500 outlets and concessions globally, had however reported solid Christmas sales, with the quirky detailing on its suits, shirts and dresses helping the company stand out from rivals.
“Questions have been raised about the loss of creativity now Kelvin has gone,” said Laith Khalaf, Senior Analyst at brokerage Hargreaves Lansdown.
“But Ted Baker is a company worth more than half a billion pounds, it’s not solely reliant on the flair of just one man.”
It said it had renewed training for all employees on HR policies and procedures and on acceptable workplace conduct.
The company will also maintain an independent and confidential whistleblowing hotline and enhance oversight of both people and cultural matters at board level.
“We are determined to learn from this process and, moving forward, cultivate a better environment for all employees where they always feel respected and valued,” Executive Chairman David Bernstein said.
Reporting by Noor Zainab Hussain in Bengaluru; Editing by Arun Koyyur and John Stonestreet