Jim Armitage: In the generation game, Ray Kelvin is the odd man out

Kelvin has managed to keep Ted Baker as a popular and powerful brand both online and in stores

Ray Kelvin is 63 next week. That’s 10 years younger than Sir Martin Sorrell, three years younger than Sir Philip Green. We’re talking ballpark same generation here.

That all three of them have been accused of behaving — ahem — inappropriately could reflect how the values of certain men of their age are colliding with those of their younger employees. (It should be said the claims are denied.)

In the cases of Green and Sorrell, it’s been claimed that they’re out of touch with their customers, too; Green in his failure to move quick enough into online retail and Sorrell in his sluggish integration of WPP’s disparate business units.

You can’t draw the same conclusions with Kelvin, though. He has managed to keep Ted Baker as a popular and powerful brand both online and in stores, retaining that quirkiness its customers like.

Unlike most rival chains, Kelvin saw the shift to digital retail early and did not get caught out with a large number of shops on long, fixed-term leases. Of his 440-odd stores around the world, three-quarters are concessions where rents are based on sales. Without a large, inflexible rent bill hanging round his neck, he’s been able to invest in online and make the transition smoothly.

Added to which, he’s just coming to the end of major warehouse and IT upgrades in the UK, Europe and the US which will bring savings and allow for faster, more local online marketing in future years.

Ted Baker’s strong international business — now 70% of takings — makes it fairly Brexit-proof, too. In short, it is a solid, well-invested business, positioned for the future.

Thursday’s figures talked of flattish sales amid weirdly warm weather. In a market where rivals are tumbling, that’s not bad.

Turnover was skewed downwards by weak wholesale orders, but that’s always a lumpy business — particularly when you have the likes of House of Fraser and Nordstrom in the US in crisis.

As temperatures chilled in the past couple of months, sales jumped 4% year-on-year. That bodes well, as do online sales (nearly a third of the business) jumping 18% through the quarter.

Yet the share price remains crippled by Hug-gate. Since details of staff complaints against Kelvin emerged, the stock has fallen 27%. That is absurd. You can only justify such a sell-off if you assume Kelvin will be fired, all creative flair at the company will be lost, and he will sell his stake.

This seems unlikely. Even if he does quit, the management and design team is strong. Most have been with the firm a decade or more. The business is in fine shape and, perhaps as importantly, why would he sell his shares now when they’re at five-year lows?

My guess is Kelvin will tame his creepy uncle antics, take a slap on the wrist by the board and get back to work.

Ted Baker will go on to be one of the winners of the retail sector. It’s time to give the shares some love. No hugging, though.