Ted Baker’s CEO has resigned following allegations that he enforced a “hugging” culture at the company.

Ray Kelvin had been pushed into taking a leave of absence last year following the allegations of harassment. Kelvin denies the allegations.

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".

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

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