Country Road Group had its worst financial year on record and job cuts are looming, chief executive Raju Vuppalapati his workers on Wednesday.
He told staff at their Melbourne headquarters that the company – whose labels also include Trenery, Mimco, Witchery and Politix – is facing a ‘perfect storm’ of challenges and that profits are plummeting.
But it was the way the CEO kicked off the meeting that raised eyebrows with staff.
Mr Vuppalapati began the meeting with a lengthy ‘Acknowledgment of Country’ speech before outlining how many of them could soon be out of a job.
Country Road Group sales fell by 13 per cent last financial year leading to a 66 per cent slump in adjusted operating profit of $51.3million, the company reported recently.
To reverse this trend South Africa’s Woolworths Holdings, which owns Country Road has been forced into a drastic restructure and cost-cutting measures.
Employees were warned that the company wasn’t ‘the best version of ourselves’.
‘This is not who we are and not our potential … and clearly 2024 has told us it is time to reset our operating model,’ Mr Vuppalapati told staff.
‘This is not just about cost, this is about looking at how we operate to bring financial discipline to invest.’
Fashion giant Country Road has had its worst financial year on record, the company’s CEO told staff on Wednesday. Pictured is a woman modelling Country Road attire
Insiders told News Corp that the new leadership structure will be unveiled on October 16 with new staff teams announced by mid-November, which is when job losses are likely to be announced.
Staff were warned that they would need ‘mindset shift’ as the company went through the restructure.
‘We need to change our operating model, an end to end relook on structure, how we work together … and ensure all brands grow,’ Mr Vuppalapati said.
The business will also examine changing sourcing and supply chain in an attempt to get cheaper deals from suppliers.
Mr Vuppalapati singled out Witchery as brand that had lost the magic that made it successful 10 years ago.
He said it and Mimco needed to return to its tradition of being a more stylistic business that drove fashion forward.
Country Road Group, which is behind household name brands such as Country Road, Trenery, Mimco, Witchery and Politix, has not just faced financial woes this year but was also rocked by a sexual harassment scandal in July.
As a result, two top executives suddenly departed the company and the global boss Roy Bagattini flew to Australia to address staff and announce an external investigation into the handling of complaints.
Following this Country Road Group set up a ‘respect at work’ working group.
Mr Vuppalapati said staff surveys were reporting a sharp drop in morale.
‘The surveys said we are not the best version of ourselves,’ Mr Vuppalapati told the meeting.
Country Road Group chief executive Raju Vuppalapati told staff in Melbourne the company needed drastic restructuring as sales slumped
Country Road Group sales fell by 13 per cent last financial year leading to a 66 per cent slump in adjusted operating profit of $51.3million
‘The emerging themes were trust, we need to rebuild trust, we need leaders to be visible.
‘Some responses have been confronting.’
In a statement, Country Road Group said it was ‘ embarking on a strategic business transformation plan to position itself for growth’.
‘We are changing our operating model to leverage our scale, capabilities and culture as a House of Brands,’ the statement said.
‘This will enable us to be passionately focused on delivering the best product and experiences for our customers.’
