Country Road faces staff exodus over new investigations, as boss stays put

Country Road Group faces the threat of a staff exodus after the fashion retailer’s boss, Raju Vuppalapati, kept his job following an investigation into the handling of complaints of sexual harassment found more reviews of the company’s workplace misconduct policies are necessary.

The retailer’s South African parent, Woolworths Holdings, in March commissioned an external investigation after staff members alleged that complaints of sexual harassment and bullying relating to a former executive, Rachid Maliki, were not handled properly.

In response to the findings, the company said it would implement “a number of actions to strengthen and enhance its complaints-handling process going forward”.

Country Road boss Raju Vuppalapati is the former chief executive of R.M. Williams, which is now conducting its own internal inquiries.Credit: James Elsby

Roy Bagattini, the chief executive of Woolworths Holdings Limited (a separate company from the Australian supermarket giant), on Tuesday flew to Australia to speak with staff and called a meeting at 1pm with one hour’s notice. The meeting was not available online to those working from home.

“I am deeply disappointed that some team members did not feel fully supported when raising complaints about inappropriate behaviour. It is clear that we did not meet our own expectations, let alone those of our employees,” Bagattini said in a statement.

“We have zero tolerance for sexual harassment and inappropriate behaviour in our organisation, and are fully committed to taking any actions needed to ensure an environment where all our team members feel safe, valued and included.”

A Woolworths Holdings spokesperson said the company’s actions would include “an end-to-end review of the complaint handling and reporting process; the launch of a refreshed sexual harassment training program to raise awareness and understanding of the complaint management process; and the commissioning of an independent review of sexual harassment and workplace misconduct policies and processes to ensure alignment with leading practice”.

The external investigation, by law firm Seyfarth Shaw, has resulted in disciplinary action against some employees, but the company declined to comment further.

“The company confirms that it is taking disciplinary action in relation to certain individuals involved in the complaints-handling process. In line with standard practice, the company will not be providing details on individual disciplinary matters,” the Woolworths Holdings spokesperson said.

Vuppalapati has retained his position as chief executive, but that decision may spark a wave of resignations as staff are angry over his role in handling complaints about Maliki, the former chief supply chain officer. Vuppalapati brought Maliki into the business in August 2022. The complaints alleged Maliki sexually harassed, bullied and intimidated female and male employees.

Vuppalapati and Maliki worked together at boot maker R.M. Williams between January 2015 and July 2021, when Vuppalapati was chief executive and Maliki general manager. They also previously worked together at Levi Strauss & Co in South Africa.

Country Road recently launched its 50th anniversary campaign.

“The culture at Country Road Group can’t move forward until the board recognises that Raju needs to leave,” said one head office employee who spoke on the condition of anonymity.

“There have been a couple that’ve left and there are quite a few preparing themselves to leave in the event that Raju continues as CEO.”

Andrew Forrest’s private investment vehicle, Tattarang, which owns R.M. Williams, is now conducting its own review of the pair’s time at the boot maker. “We are aware of the reports and are conducting internal inquiries,” a Tattarang spokesperson said.

“The behaviour in the reports is contrary to the company values and is not tolerated. The safety and wellbeing of our employees is our priority. We actively encourage a speak-up culture.

Woolworths Holdings chief executive Roy Bagattini held an all-staff meeting at Country Road on Tuesday.

“Given the nature of the reports we have reminded staff of the confidential counselling and support services which are available.”

Some Country Road staff in departments where Maliki worked knew of his allegedly inappropriate behaviour, a source said, but the broader company was unaware until the all-staff meeting in March.

“Basically, when Rachid came in, there was a noticeable change in culture,” the employee said. “The biggest issue is no actions were taken [about alleged] victims’ complaints.

“We believe Raju was purposely stonewalling complaints, but there’s no proof.”

Amid staff anger about complaints not being dealt with properly, an employee survey was taken in December, where some sexual harassment and bullying allegations were detailed.

Maliki left the business in February. An all-staff meeting was called in March, during which Bagattini visited Australia to hear from employees.

At the March staff meeting, multiple employees – including some leadership executives – called for Vuppalapati to stand aside while the external investigation was conducted, but Bagattini rejected the idea, an employee said.

“It’s openly stated around the office and in discussions in the forum in March, I believe, people were calling for him to at least be suspended whilst the investigation was ongoing, which Roy denied,” the staffer said.

A Country Road store in Melbourne is plastered in posters after the retailer launched an internal investigation into alleged mishandling of staff complaints about bullying and harassment.Credit: Wendy Tuohy

At Tuesday’s staff meeting, Bagattini confirmed Vuppalapati would remain as chief executive when an employee asked if he would continue in the role.

Country Road’s Melbourne flagship store in South Yarra had its windows covered by posters last week as protesters called on the company to “stop the cover-ups” of alleged sexual harassment.

Country Road, which also operates the Mimco, Trenery, Politix and Witchery brands, is trading in a challenging retail environment in which consumers are pulling back their discretionary spending amid cost-of-living pressures.

Australians can access Woolworths Holdings’ whistleblower policy online. It contains details about an independent hotline [phone]) and a tip-off email address at [e-mail].

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