Super Retail CEO Anthony Heraghty’s grip on power unmoved by alleged affair
As workplace gossip swelled, an alleged affair with the CEO conferred power to his exec lover, court documents released this week claim, and fostered a fear of speaking up.
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When Peter Birtles posed for a photo with Anthony Heraghty in the car oils and lubricants aisle of the Supercheap Auto store in the northern Brisbane suburb of Lawton in January 2019, the contrasts between the outgoing and incoming chief executives went deeper than appearances.
Birtles, greying and with glasses, was in his typically understated fashion wearing a business shirt with the Super Retail Group logo embroidered across the breast pocket. Sure, it was a bit daggy, and this photo opp was meant to commemorate a succession plan at the auto, sports and camping retailer, but it underlined the leadership style staff loved about Birtles.
After all, many employees wear colour-blocked company polos on the shop floor.
Next to him was Heraghty, suited but relaxed, that dynamite smile and looking naturally exuberant having bagged the CEO role insiders say he had coveted since he was running a division at the once mighty clothing manufacturer Pacific Brands.
A former colleague of Heraghty’s at Pacific Brands, known then for Bonds underwear and Sheridan sheets, recalls Heraghty as charismatic, funny and a bit of a larrikin, but always collegiate and did well helping to resuscitate the struggling clothing brands business.
But staff at Super Retail’s headquarters in Brisbane began to detect other differences as Birtles left the scene and as Heraghty settled in to the Super Retail operations made up of Supercheap, Rebel, Macpac and BCF. Birtles was known for being careful with shareholders’ money, some could diplomatically call it frugal; he stayed at the cheapest hotels he could find – as did senior executives – he flew economy, and kept the executive leadership team focused on the philosophy of working for investors and keeping close to their retail workforce.
As one former Super Retail insider told The Australian, “there was no two-speed model between executives and store staff”. Birtles and Heraghty declined to be interviewed by The Australian when contacted on Friday.
But whatever Heraghty was doing, his leadership worked wonders for the share price with Super Retail stock since he started as CEO in 2019 up 89 per cent – a period which includes Covid-19 lockdowns and rampaging inflation – which is more than double the performance of the S&P/ASX 200 over that period.
Seven years ago, much of that frugal corporate tendency and modest philosophy seemed to stop, or at least soften, as Heraghty assumed the CEO role and a cultural shift emerged. More expensive hotels were chosen for executives and board members as they convened various leadership or board meetings. As the same insider told The Australian, word made its way around the office that for some female executives, staying at cheap and cheerful Mantra accommodation didn’t pair well with ‘Valentino flats’.
It was at a much more ritzy venue – to be specific, the Calile Hotel in Brisbane famous for its Instagrammable pool – that Heraghty was allegedly seen acting suspiciously late one night in the lobby with head of human resources, Jane Kelly.
There was good reason for both of them to be there. The Super Retail board and senior executives were in town for meetings as well as dinner nearby, and the Calile was being used to host out-of-town executives, such as Kelly. Super Retail and Heraghty have strongly and consistently denied any illicit affair, with Super Retail also conducting an independent investigation into the matter, called for by former Super Retail chair Sally Pitkin, which found no evidence of any romantic relationship between the pair.
But according to court documents lodged this week as part of the ongoing court case between two former Super Retail executives turned whistleblowers and the retailer, Heraghty and Kelly’s behaviour stood out to those who happened to walk by.
Rebecca Farrell, the former Super Retail chief legal officer who is one of the whistleblowers suing the company, was told that co-company secretary Amelia Berczelly (the second whistleblower suing Super Retail) as well as board administrator Lise Frazer had “just observed Heraghty (a resident of Brisbane) enter the lobby … late at night to meet with Kelly” according to the documents.
Farrell’s amended statement of claim stated that Heraghty and Kelly had acted in a manner “that was very suspicious and suggestive that they were engaged in an intimate or personal relationship that had not been disclosed to the board”.
“Heraghty and Kelly had both behaved in an awkward and suspicious manner when they realised they had been seen by Berczelly and Frazer,” the documents said.
This chance encounter happened in mid-June 2023 and was particularly concerning to Farrell and Berczelly because, as they claim, at the time Heraghty was involved in “devising, recommending and approving Kelly’s exit arrangements” from the company.
Stories, rumours or mere office gossip circulated the alleged affair between Heraghty and Kelly, and possibly as far back as 2020. According to Farrell’s court documents, the boss of Super Retail’s Supercheap division, Ben Ward, its Rebel stores, Gary Williams, BCF, Paul Bradshaw, and Macpac, Cathy Seaholme, “believed” an affair was going on and raised the issue with Farrell. More than that, the court documents allege that Heraghty’s wife at the time is claimed to have found evidence of the contested affair on Heraghty’s mobile phone and told Heraghty’s executive assistant.
The point was, the senior leadership believed an affair between Heraghty and Kelly to be taking place, and this alleged affair conferred power to Kelly.
“Ward, Williams, Bradshaw and Seaholme again complained or disclosed to the applicant (Farrell) verbally that they believed Heraghty and Kelly to be in a relationship and that, notwithstanding their apprehensions, Ward and Bradshaw in particular wished to escalate their concerns with Kelly’s conduct,” the court documents claim.
That was not all.
“Bradshaw confirmed that in April 2022, during an executive leadership team (ELT) offsite (meeting), he had observed Heraghty resting his hand on Kelly’s thigh while the ELT were drinking at a bar in Manly, New South Wales,” the claim continues.
Some wanted to raise complaints about Kelly’s alleged bullying behaviour, but there were fears of repercussions as it was believed Kelly’s alleged relationship with the CEO had insulated her from criticism, and that any executive who spoke out could find themselves under unwelcome pressure.
Many were nervous, according to the same documents, feeling as though they could not report their concerns to the board because “(chair) Pitkin is very close to Heraghty and Kelly, and they feel that Pitkin would somehow sweep such matters under the carpet”.
Farrell’s statement of claim also mentions a “culture of bullying” by Heraghty and Kelly, while an internal survey of top executives conducted in late 2023 reported that some felt “there is no safe space to speak up … (and) … there is too much conflict and nepotism”.
Kelly had enjoyed a successful rise at the company, and was perceived by some executives as exerting power and influence – especially with Heraghty, the documents allege. But by the end of 2023, that power was coming to an end as Super Retail began to organise a redundancy and exit for one of its highest achieving women. Although, such was Kelly’s influence that after she was made redundant on December 15, she was immediately rehired – despite staff and whistleblower complaints about her behaviour and the alleged secret affair – as a paid consultant to help select a replacement for outgoing chair Pitkin who planned to depart in 2024, as well as find new directors.
The new statements of claim from Farrell and Berczelly argue why she asserted such power, perceived or otherwise. Namely that from at least 2020, Heraghty was conducting an alleged clandestine affair with Kelly. This was her real source of power, the court documents claim, and she allegedly used to her own advantage and to the disadvantage of others.
And despite the fact that by late 2023 it was clear that Kelly would be leaving the company, it was allegedly organised that Kelly would travel with Heraghty on a business trip to Germany.
In particular, a Super Retail employee disclosed to Farrell verbally that she believed “Heraghty and Kelly to be in a relationship”, by way of explaining her presence in Germany, the documents said.
“The existence of the relationship explained why, notwithstanding Kelly’s resignation and imminent departure from Super Retail, Kelly had recently attended a trip to Germany and had subsequently travelled to London, and returned from there to Sydney, with Heraghty,” the claim continues.
Farrell and Berczelly have had the stage and have been able to detail their allegations in open court, while Super Retail must wait to produce its defence documents, which are expected to be lodged with the court in the next two months. That will include a detailed rejection and denial of the sensational allegations levelled by Farrell and Berczelly.
Interestingly, former chair Pitkin now has separate legal counsel to Super Retail, and she has reportedly told friends she is keen to fight the case in open court and defend her reputation as well as her governance of the board. She is reluctant, it is believed, for the case to be settled and dropped.
It is now a year since Super Retail first alerted the market and investors to a workplace issue and potential litigation involving its CEO and then unnamed executives turned whistleblowers. When Super Retail six years ago owned up to underpaid staff wages that quickly ballooned to more than $60m, Birtles eventually fell on his sword, telling those around him that “the buck stops with me”. That was his style.
And while Super Retail and Heraghty have never admitted to any wrongdoing, Heraghty remains bunkered down as CEO, with no apparent pressure on his leadership. That’s his style.
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