Major Australian fashion retailer Mosaic Brands has entered voluntary administration, putting thousands of jobs at risk.
The company behind well-known brands such as Katies, Millers, Noni B, Rivers and Autograph broke the news to the Australian Securities Exchange on Monday afternoon.
Mosaic Brands is Australia’s largest women’s fashion retailer group and had employed more than 4000 staff in more than 700 stores nationally during a cost-of-living crisis.
‘Following recent attempts by the company to informally restructure its operations, the board of Mosaic has determined that voluntary administration is now the most appropriate way to restructure the group,’ the company told the ASX.
FTI Consulting directors Vaughan Strawbridge, Kathryn Evans, Kate Warwick and David McGrath have been appointed as administrators.
Mosaic’s senior secured lender has appointed KPMG as receivers and managers to help the administrators with the restructure.
FTI Consulting will determine if Mosaic Brands can either continue trading go into liquidation, which means assets are sold to repay creditors.
Major Australian fashion retailer Mosaic Brands has entered voluntary administration, putting thousands of jobs at risk
The company is Australia’s largest women’s fashion retailer group and had employed more than 4000 staff in more than 700 stores around the country
The announcement comes just weeks after Mosaic announced it would be closing five of its major retail franchise chains.
Rockmans, Autograph, Crossroads, W.Lane and BeMe brands – including their stores and websites – will be shut down, Mosaic chief executive Erica Berchtold confirmed in October.
Ms Berchtold said the shuttered brands had ‘become marginal and non-core’ and closing them would allow the company to focus on its remaining five.
At that time, the group stated it was focused on the brands Millers, Noni B, Rivers, and Katies. However, the future of these brands is now uncertain.
Mosaic told the share market it had spent the ‘past few weeks’ restructuring its assets.
‘These initiatives have included rationalising the group’s brand and store portfolio and focusing on key growth brands, reducing costs and improving Mosaic’s working capital position,’ it said.
Mosaic will close down multiple ventures including Rockmans stores (pictured)
Professor Gary Mortimer, Queensland University of Technology Business School retail expert, said Mosaic Brands made the mistake of ‘essentially creating multiple brands to market to the exact same audience – middle aged, middle class woman’.
‘If you walk into a shopping centre, you will find at least two, if not three, of those brands all competing for the same customer and that just duplicates and triplicates the cost of doing business,’ he told News Corp.
Professor Mortimer likened the overlap to what Kmart and Target – both owned locally by Wesfarmers – were doing, often competing against themselves.
Mosaic now has 763 stores across Australia and New Zealand but has been trying to focus more on big-box Rivers megastores in regional Australia as part of its ‘BIG strategy’.
Noni B’s founder Alan Kindl, an industrial chemist who founded the first store in Newcastle in 1977 with his wife Betty, died in August, aged 86.
They had sold their shares to investment group Alceon Group a decade ago.
Mosaic Brand’s share price has collapsed to just four cents, down from $3.48 in September 2018.
