Ted Baker founder Ray Kelvin will take a temporary leave of absence after allegations of harassment were made against him.
The company stated that a committee of directors looking into the claims had been made aware of further serious allegations regarding the chief executive.
Mr Kelvin then agreed to go on leave for the benefit of the business and the people who work in it, Ted Baker said.
The 62-year-old was accused of enforcing a hugging culture at the firm over the weekend, after a petition was launched calling for an end to his harassment.
Both male and female employees came forward to complain about his alleged behaviour.
There were also claims that the businessman massaged employees, kissed their ears and asked some to sit on his lap.
Directors who abuse their power should be held to account, the petition read.
Harassment at Ted Baker is well documented but wilfully ignored by those in charge.
Mr Kelvin said in a statement that the accusations had raised some very serious and upsetting issues.
Ted Baker has been my life and soul for 30 years, he said.
I love this company and I care deeply for all my colleagues. Its for that reason that I have decided to take a temporary leave of absence.
Ted Baker means everything to me and I cant bear to see it harmed in any way.
Chief operating officer Lindsay Page has been appointed interim CEO.
Mr Kelvin founded Ted Baker in 1988 and is worth £552 million, according to the Sunday Times Rich List.