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Ted Baker's CEO resigns over claims of "forced hugging"

London - The CEO of fashion retailer Ted Baker has resigned after allegations that he enforced a "hugging" culture at the company.

Ray Kelvin had been forced to take a leave of absence last year following the allegations of harassment. Kelvin denies the allegation.

Executive Chairman David Bernstein said Monday that "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."

The company's board appointed had Chief Operating Officer Lindsay Page as acting CEO while Kelvin was on leave.

George Salmon, an equity analyst at Hargreaves Lansdown, said Kelvin was crucial to building up the company from a single shirt ship in Glasgow into a 1 billion pound-plus global company.

But he said "a rocky few months has seen that premium market value disappear."

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Officials at Ted Baker vowed to investigate worker complaints about Kelvin's conduct after allegations came to light when more than 2,500 signed an online petition calling for an end to "forced 'hugging' by the CEO," calling it "part of a culture that leaves harassment unchallenged."

In addition to customers, the petition includes the signatures of several hundred former and current Ted Baker employees, according to British media reports.

The company in December said it would look into the allegations and follow with an "appropriate" response.

"Ray, and the company's leadership, have always prided themselves on Ted Baker being a great employer and business to work with," it said at the time in a statement. "Accordingly, they and the board take these concerns very seriously and the Board has directed a thorough and urgent independent external investigation is carried out into these matters."