Country Road staff jeer global CEO at town hall meeting
Staff were in open revolt when the meeting called by global chief executive Roy Bagattini kicked off on Tuesday, and became angrier as it progressed.
Country Road Group staff have openly and loudly jeered the South African boss of the high street fashion chain owner at a crisis staff town hall meeting held this week, when he initially blamed lower level business managers and human resources officers for “failing the system” in not properly escalating up the chain of command claims of sexual harassment and workplace bullying.
Woolworths Holdings chief executive Roy Bagattini’s comments, as well as asking staff if they had taken sexual harassment training or read the company’s workplace guidelines, triggered howls of indignation from staff who have been through months of a toxic corporate culture.
Speaking on Tuesday at a town hall meeting to explain the findings of an investigation into the handling of numerous sexual harassment and bullying allegations, Mr Bagattini was viewed by many as trying to shift blame away from the boss of Country Road Group and towards others in the organisation.
“I am talking about the ecosystem: the line managers failed the system, HR certainly failed the system,” Mr Bagattini said
In what was already a supercharged environment in the wake of allegedly improper workplace behaviour that stretches back to last year, Mr Bagattini – who said at the meeting it was the “lowest point in the company’s history” – faced an open staff revolt at the fashion house that is now engulfed in scandal, and which reached its noisiest in the Tuesday meeting when they believed that Mr Bagattini was trying to blame business line managers and HR executives for the mishandling of these workplace complaints.
This anger reached flashpoint later as he refused to divulge if Country Road Group CEO Raju Vuppalapati had been specifically disciplined given the trail of sexual harassment and bullying allegations that had mounted under his watch and that had been left festering for several months. The calls for Mr Vuppalapati to be disciplined relate to his alleged failure to properly manage the issues arising under his oversight, with many staff let down by his lack of leadership, however he himself is not the subject of any sexual harassment or bullying allegations.
Staff anger further erupted when a number of times during his presentation and at a Q&A session Mr Bagattini referred to “myths” and an incorrect “narrative” about what had gone on at the retail group and that was now very public and splashed across the media.
He said a lot of what had been written in the press “was not true”.
In a prickly and sometimes rowdy staff meeting at Country Road Group’s Melbourne headquarters in Burnley that lasted for around 75 minutes, and later relayed to The Australian, Mr Bagattini triggered jeers from the floor when he seemingly blamed some senior staff for “failing the system” in not immediately escalating workplace complaints.
“The point is these complaints were not handled correctly or appropriately to the fullest extent, a couple of them might have been, but the vast majority were not,” Mr Bagattini told staff.
Mr Bagattini was viewed as shifting the blame to some employees, rather than Country Road Group leadership, and especially Mr Vuppalapati, which lit a match under the meeting, and especially as he questioned if people in the audience had actually read the company’s sexual harassment policy.
“That points to the fact we didn’t meet those expectations we set for ourselves in terms of response. The (sexual harassment) policy is clear, I don’t know if you have read the policy? I would really encourage you to read the sexual harassment policy.
“We have done training, right? I don’t know if you have been to the training?” Mr Bagattini asked.
“We all have!” came the shout from some irritated staff.
Then Mr Bagattini said: “Yet, and I am talking about the ecosystem: the line managers failed the system, HR certainly failed the system.”
This was also shouted down by staff on the floor, now in open defiance of the company’s most powerful and senior executive, who asked him to stop blaming junior managers and HR staff for the crisis.
It is believed Mr Bagattini will be in Australia for the next week as he continues to talk to local staff about the workplace issues and subsequent investigation. Woolworths Holdings, based in South Africa, owns Country Road Group and kept ownership of the business after selling department store David Jones for $120m in December 2022. One of the nation’s leading and most cherished fashion houses Country Road Group – which owns brands Country Road, Trenery, Witchery, Mimco and Politix – is now in the midst of scandal and open staff revolt.
Many in the audience on Tuesday told Mr Bagattini he was “blaming the victim” as he tried to detail the investigation, its recommendations, and what went wrong at the fashion retailer. They openly heckled Mr Bagattini that allegations of serious workplace misconduct were indeed made but not taken seriously or followed up.
This is the heated arena Mr Bagattini walked into as he held his staff meetings on Tuesday to detail the investigation’s findings and the company’s response to them. At times shouted down from the floor by angry staff, at other times heckled and with open sniggering heard, Country Road Group staff let it be known that they felt let down by the retailer’s senior leadership, not listened to and most importantly not shown the pathway to rebuild trust in the workplace, the company and its CEO.
“We are committed to never find ourselves again in the situation we have been in the last several months,” Mr Bagattini told his staff. “You don’t deserve it, we can’t afford it.”
He also described the staff who came forward to complain about sexual harassment and bullying as “super courageous”.
Flying into Melbourne to personally discuss the results of an external investigation into its workplace culture, Mr Bagattini also earned the ire of his staff over how Mr Vuppalapati had hand-picked former executive Rachid Maliki to join the company as its supply chain chief, with the two working together at country apparel outfitter RM Williams, and Mr Maliki later suddenly departing Country Road Group in February in the wake of sexual harassment allegations. Staff at the meeting pushed Mr Bagattini to explain why their allegations about Mr Maliki weren’t listened to, especially by Mr Vuppalapati.
Following allegations of sexual harassment and bullying, it is believed Mr Maliki was given two weeks leave as an investigation was mounted. He later exited the business suddenly on February 19 after only 19 months in the role. A second executive and colleague of Mr Vuppalapati, Mehmed Mustafic, was also brought across from RM Williams but suddenly exited the business on March 21 after serving for only 10 months in the role as general manager of sourcing and product development. He faced allegations around the treatment of some staff at the Burnley head office. These allegations did not include sexual harassment or sexually inappropriate conduct.
It has all left the once cherished Country Road brand tainted in the eyes of many of its staff, who directed their disappointment and resentment at Mr Bagattini as he tried to walk through the company’s response to the allegations and subsequent investigation. But in a frank admission about the wretched culture that has now engulfed the group, Mr Bagattini conceded to the meeting that Country Road Group was not too long ago a “remarkable place to work” but had now “lost its soul”.
This was shown up in a staff survey last year that was amongst the best ever results for the fashion group, but in the wake of the sexual harassment and bullying allegations a more recent staff survey was highly negative, with Mr Bagattini quipping to the meeting, “and boy, was that bad”.
Its parent Woolworths Holdings had hoped an externally led investigation into the handling of these allegations would help to start to heal these open wounds, mend its battered reputation and rebuild its strained corporate culture.
But the results of the investigation, released this week, seem to have thrown fuel on the flames.
Staff asked for details but were told much of the investigation, conducted jointly by Australian and South African law firms, contained privileged information – particularly about staff that made allegations – and that he couldn’t breach that confidentiality. Mr Bagattini also attempted to quell staff anger over the lack of transparency over which senior Country Road Group executives had been disciplined, but came up against a wall of protest as many staff demanded to know what action had been taken, if any, against Mr Vuppalapati.
Mr Bagattini conceded Mr Maliki was referred to the business by his former RM Williams workmate Mr Vuppalapati but that he went through a thorough recruitment process at Country Road Group, and wasn’t “shoehorned” into the role by Mr Vuppalapati because he was his “buddy”.
Mr Bagattini also said parent company Woolworths Holdings had interviewed Mr Maliki for the role and the overwhelming consensus was he would be a good fit for the job and the company.
During the meeting Mr Bagattini, who was flanked by Country Road Group CEO Mr Vuppalapati and a lawyer from the South African law firm that worked on the investigation, also strongly denied he wasn’t trying to “sweep it under the carpet” but admitted the sexual harassment and bullying scandal now gripping the fashion house was like “a noose around our neck” and a “distraction”.
When he spoke towards the end of the meeting, Mr Vuppalapati said the “buck stops with me” and that he was committed to delivering on their expectations about fixing the workplace culture at Country Road Group.
Some staff fired back that he had been missing from the office for eight weeks as they were going through a “traumatic experience” and that Mr Vuppalapati “wasn’t showing up as a leader”.
Mr Bagattini said it was crucial for the Country Road Group boss to show leadership.
Mr Bagattini also during his address on a few occasions described as “myths” or a false “narrative” about what had been said about the allegations now swirling around Country Road Group, which only caused more open indignation from the staff, and called on everyone to eventually “close the chapter”, “move on” and “put this behind us”. This was not greeted warmly by some staff.
Addressing the staff’s key concerns that nothing has been learned from the scandal, Mr Bagattini told them the company was “doubling down” on its corporate processes to “ensure it never happens again” and that Woolworths Holdings and Country Road Group leaders held themselves “personally accountable”.
He said as part of a wider program of refreshing, updating and improving its sexual harassment guidelines the Country Road Group board would have on its agenda every quarter an item relating to discussing sexual harassment issues and if any new issues have arisen among staff.
Mr Bagattini also committed to bringing in an external firm next year to review the company’s progress on its promise to staff and work around improving workplace culture and its employee behaviour programs.
“We are holding ourselves accountable to that, I’m personally putting a lot of focus on that, I’d be surprised if this ever happens again and if it does happen it will be handled better,” he told staff.
He also strongly denied trying to “gag” Country Road Group staff from talking to outsiders, namely the media, about the ongoing workplace culture.
“I can promise you I did not attempt to gag anybody, to silence anybody at all,” he said.
In many instances through his presentation and staff address he begged his employees to put behind them the last several months and “close the chapter” on the crisis.
The investigation report has not been made public.
In a statement released by Mr Bagattini on Tuesday he said he was 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. 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.”
There have been no official findings against Mr Maliki or Mr Mustafic. Both were contacted for comment by The Australian. It is not known whether Mr Maliki or Mr Mustafic will be given the opportunity to defend themselves in response to the allegations in the review commissioned by Country Road. There have also been no allegations made against Country Road Group CEO Mr Vuppalapati.
On Wednesday a spokesman for Woolworths Holdings told The Australian it had been a “challenging period” for its staff and the business.
“We are committed to communicating openly and transparently with our team members as well as giving them the opportunity to voice any concerns and ask any questions that they may have. As part of this, Roy has been conducting a series of in-person sessions with team members to provide a platform for open engagement.
“While this has been challenging, we are confident that we have outlined a clear path towards strengthening our processes and culture. We look forward to working together to achieve this goal and refocusing on our business priorities.”
The spokesman said the external investigation involved extensive interviews with complainants as well as many other people within the organisation.
“People participated on the basis it was confidential and privileged, and we cannot break that trust with those people or with the company.”
In terms of the recruitment process that saw the two former executives join the retailer, including Mr Maliki, he said Country Road Group follows standard recruitment procedures for all team members, and appointment decisions are made based on merit.
“This includes all applicants that are referred to the business by current employees.”
Meanwhile, as the Tuesday staff meeting reached its end, Mr Bagattini conceded there was plenty of work to be done.
“There’s a lot of work we have to do to get hearts and minds back in play,” Mr Bagattini said.
“It has been a negative … we have to get beyond this, this is not right.”
He said Woolworths Holdings had taken actions as severe as they needed to be given what had happened but understood many staff would still not be happy.
“You have a truth, and that’s your truth, and I haven’t been able to present alternative facts to you to change your truth.”
Mr Bagattini said everyone needed to take a “little bit of accountability” and he was “really sorry” he hadn’t met everyone’s needs.
“I don’t feel sorry for myself, but it is terrible having this conversation with your organisation,” Mr Bagattini said.
“It is the lowest point in the company’s history.”
Staff left to go back to their desks; some dejected, some satisfied, many angry, and many worried about the corporate culture they are now left with at Country Road Group.
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