Gary Friedman shows the charisma that made him so closely associated with the brand at a Restoration Hardware opening in 2011 in Los Angeles.(Craig Barritt/WireImage)
The chief executive of luxury homeware brand Restoration Hardware has stepped down after his relationship with a 26-year-old employee was revealed by her bitter ex-boyfriend, it has emerged.
The female employee, who has since left the company, is still dating Friedman, who has been divorced for seven years, according to the New York Times's DealBook.
He reportedly stepped down as CEO this week because the in-house relationship had the potential to damage the company's reputation ahead of its initial public offering this fall.
'The board... was concerned about the credibility of the allegations because the ex-boyfriend had a criminal record and was aggressively pressing the accusations both inside and outside the company,' Andrew Ross Sorkin of DealBook wrote.
The board confronted Friedman this month with their findings and he stepped down on Wednesday.
Friedman is largely credited for turning the company, now worth $1 billion, into the highly-regarded luxury brand, which sells faux antique furniture and hardware accessories, the Times reported.
He often appears in the company's catalogues and his letter and picture will feature in the fall catalogue, despite him stepping down. His picture still remains on the company's website.
Boards are becoming increasingly strict with executives; in 2010, Mark Hurd, the former CEO of Hewlett Packard, was kicked out after allegations of sexual harassment from a female employee.