Ted Baker founder loses £58m as shares tumble by another 40pc

A FRESH warning over profits sent shares in Ted Baker tumbling 40pc – costing departed founder Ray Kelvin £58m.

The company – which has been dogged by harassment claims against Kelvin in a ‘forced hugging’ scandal – racked up first-half losses of £23m having made profits of £24.5m in the same period last year.

To make matters worse, it said trading in the second half has ‘started slowly, not helped by the unseasonably warm weather in September’ hitting demand for autumn clothes.

It added: ‘If these trends continue, we will achieve a second-half result below that of last year.’

Ted Baker shares fell 40pc, or 370.5p, to 555p, reducing the value of Kelvin’s 35pc stake by £58m to £86m.

Shares are at their lowest level for nine years and down more than 83pc since early last year.

Alongside the dismal results, Ted Baker revealed it has spent £2m investigating Kelvin ( pictured) over the forced hugging scandal, and the firm’s complaint procedures. The 64-year-old, who founded the chain in 1988, was said to have asked young female staff to ‘sit on his knee, cuddle him or let him massage their ears’.

An internal independent committee and law firm Herbert Smith Freehills were brought in to investigate the allegations, and assess the company’s complaint policies.

Kelvin denied all allegations of misconduct but resigned as chief executive in March. The latest trading figures suggest the firm’s fortunes have not improved, costing Kelvin a fortune. The 15.54m shares he owns would have been worth more than £550m when the stock peaked at 3555p four years ago.

Bosses blamed the problems on ‘very difficult trading conditions’ including ‘unprecedented and sustained’ price promotions and ‘distressed discounting’ from High Street rivals. The interim dividend was slashed from 17.9p per share to 7.8p.