Ray Kelvin of Ted Baker

Ray Kelvin, founder of fashion retailer Ted Baker, is described on the company’s website as the “closest man to Ted”. But it is his alleged proximity to less fictional employees that the company would rather not publicise. And now that he has decided to keep his distance, by resigning as chief executive amid an investigation of his “hugging” of staff, it might not have to.

For the group’s management and shareholders, Monday’s news that Ray was letting go of Ted ended three months of uncertainty since complaints about Mr Kelvin’s conduct were first reported and he took a leave of absence. It was an uncertainty that appeared to have weighed heavily on investors’ minds, at least. Although strong Christmas trading had returned Ted Baker’s shares to pre-hug controversy levels, they plunged last week after a warning about one-off costs — and, as the FT Lex column noted: “Under normal circumstances, shares do not crash 12 per cent in response to a few non-cash charges.”

Investors seemed to share the fears of analysts who had argued “A rocky few months has seen [Ted Baker’s] premium market value disappear . . . the allegations around the CEO have of course played a part”. Resolving the CEO uncertainty could therefore play a part in restoring that value. Some certainly thought so: Jefferies’ analysts suggested it was an opportunity to “move forward” and “get back on the front foot” — manoeuvres deemed welcome from Ted, if not from Ray. Shares in the company rose 5 per cent, putting a metaphorical unwanted squeeze on the speculators who had sold them short, expecting to be able to buy them back more cheaply. Liberum’s analysts said they were reassured by Ted Baker’s “strong team and culture”.

However, the management team’s stance on the hugging investigation seems anything but strong. It appears to have shifted based on Mr Kelvin’s belated resignation.

Company insiders said the investigation had comprised two parts: first assessing what the allegations were, and then how they were handled. But Monday’s announcement after Mr Kelvin’s resignation said the investigation would continue with “the primary focus . . . being on Ted Baker’s policies, procedures and handling of complaints”. It sounded as if the focus on the allegations would not continue because Mr Kelvin decided to resign after waiting three months to see what was being alleged. For someone who has always denied any misconduct, this wait-and-see approach seemed odd. Why would anyone confident that allegations were false resign after three months, forfeiting pay and bonus?

These are answers that the Ted Baker board does not seem keen to pursue, or to publish, judging by its statement. Chairman David Bernstein is now staying on for up to another 18 months to support the management and oversee succession. A wider change of personnel might be needed, though. If Ray was the closest man to Ted, the directors seem too close to Ray.

Ashley’s Findel gamble

Mike Ashley, self-appointed saviour of the high street, has taken stakes in all manner of retailers from Debenhams to French Connection, writes Kate Burgess. Now his Sports Direct empire has paid 161p a share to lift its holding in Findel, the online and catalogue retailer, from 29 per cent to nearly 37 per cent. Takeover rules now require the billionaire to offer to buy the whole of Findel for the same price. That is nearly half the level the shares peaked at in July and about two-thirds of the price that Mr Ashley originally paid for his 29 per cent stake in 2015 and 2016.

Sports Direct talks of expanding its commercial arrangements with Findel and flogging more of its kit through Findel’s website and mail-order business. It also — rather puzzlingly — says “it does not believe the offer will affect the Sports Direct group”. Otherwise it is keeping schtum.

Lombard can only speculate that Mr Ashley does not believe Findel’s recent share price reflects its recovery from past difficulties. Or he is betting that Findel’s shareholders won’t sell for 161p when the shares are trading at 173p in the market. If so, it could be a big gamble — if he is wrong, paying £100m or so to expand an existing arrangement would be over the odds.

As the owner of 60 per cent of Sports Direct, the bashful billionaire is wagering his own money. But he is also using the capital of other investors, who have lost a packet in both Sports Direct as well as Findel. Mr Ashley owes them more of an explanation.

Daily Mail takes control

Daily Mail and General Trust has earned City plaudits for a complex deal to hand its stake in Euromoney direct to investors. Morgan Stanley said: “The manoeuvre is designed to remove the holding discount on Euromoney shares . . . It turns DMGT into a smaller group but one with full control of its assets.” Another clever change of position on taking back control? From the Daily Mail? Fancy that.

matthew.vincent@ft.com

Sports Direct: kate.burgess@ft.com

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