British fashion chain Ted Baker said it would investigate claims against chief executive and founder Ray Kelvin relating to his habit of hugging business colleagues.
An online campaign claiming to represent over 200 employees has called on the company to end "forced hugging" and "a culture that leaves harassment unchallenged."
Ted Baker said that an independent committee of non-executive directors had been appointed to ensure that the views and concerns mentioned in the petition are considered and appropriate responses are taken.
There was no direct comment from Kelvin himself, who owns around 35 percent of the company according to Refinitiv Eikon data.
Kelvin, 62, developed the Ted Baker brand and has been chief executive since the launch of the company in 1988.
"Ray greets many people he meets with a hug, be it a shareholder, investor, supplier, partner, customer or colleague," the company said in a statement.
"Hugs have become part of Ted Baker's culture, but are absolutely not insisted upon," it added.
"While the claims made are entirely at odds with the values of our business and those of our CEO, we take them very seriously and will ensure that a thorough independent investigation is carried out," the company said.
Ted Baker's shares fell 12.9 percent to 1591 pence at 1200 GMT and was the second largest loser on the FTSE 250 index.
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