Ted Baker shares plunge by more than a third after CEO’s ouster

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Ted Baker has more than just a hugging problem.

The London-based fashion house — whose founder Ray Kelvin was forced out earlier this year over a slew of sex harassment allegations — said Tuesday its chief executive and chairman have left as it warned on profits and suspended its dividend.

Lindsay Page, who succeeded Kelvin as chief executive in March, stepped down on Tuesday when the company slashed its outlook for the quarter ending in January. Executive chairman David Bernstein also is leaving.

Ted Baker shares on the London Stock Exchange plunged as much as 35% to a 16-year low, prompting AJ Bell analyst to declare that “Ted Baker is truly having the nightmare before Christmas.”

Kelvin — who is famous for covering his face when he’s photographed — was accused by hundreds of former and current employees of giving unwanted hugs, kissing and caressing their ears and even directing them to sit on his knees.

Top executives at the company had been accused of ignoring employees’ complaints about 63-year-old Kelvin, who founded the company in 1988 with a shirt shop in Glasgow, Scotland.

Last week, the company’s shares plunged after it disclosed it may have overstated inventory by as much as $32 million. The stock has lost 75% of its value this year.

“The last 12 months has undoubtedly been the most challenging in our history,” Ted Baker’s board of directors said in a statement. “We are taking the necessary immediate actions to address underperformance and improve efficiencies.”

In contrast to some other British retailers, Ted Baker said its performance during November and the Black Friday sale period was below expectations, leading it to cut its pre-tax profit forecast to a minimum of 5 million pounds, versus a profit of more than 50 million pounds last year.

“This is a train wreck of an update, and it feels like the company is coming apart at the seams,” CMC Markets analyst David Madden said.

With Reuters

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