Fashion retailer Mosaic Brands, owner of Rivers, Millers, Katies, and Noni B, has entered voluntary administration. The announcement has raised concerns about the future of nearly 3,000 employees across the company’s extensive retail network.
Mosaic Brands Restructures Amid Financial Struggles
Mosaic Brands confirmed its entry into voluntary administration on Monday afternoon, notifying the Australian Securities Exchange (ASX). The retail giant, which operates over 700 stores nationwide, attributed the decision to ongoing financial pressures and a failed restructuring effort.
The administration process will be overseen by FTI Consulting, with KPMG managing trading operations during the transition. Despite the administration, Mosaic Brands will continue trading normally in the lead-up to Christmas, aiming to stabilise operations during the crucial holiday period.
Five Brands Shuttered to Streamline Operations
In September, Mosaic Brands announced the closure of five underperforming labels—Rockmans, Autograph, Crossroads, W.Lane, and BeMe. The company intended to focus on its core brands: Millers, Noni B, Rivers, and Katies.
At the time, Mosaic’s management said the brand reduction aimed to “capitalise on and invest in” key labels while streamlining operations.
Failed Negotiations Trigger Administration
Mosaic Brands administration comes after recent discussions with stakeholders, including suppliers, landlords, and the Australian Competition and Consumer Commission (ACCC). Although most commercial partners supported the restructure, a small number opposed it.
The company said its leadership explored every possible avenue but failed to reach a commercially acceptable solution with the ACCC. “This process included discussions with local and international stakeholders,” Mosaic’s statement read. “The administration offers the most appropriate way to reset the business.”
Christmas Trading Remains a Key Priority
Mosaic Brands reassured customers and employees that it would trade as usual, focusing on the peak holiday season. “Our team remains committed to serving customers through Christmas and beyond,” the company said.
CEO Erica Berchtold stressed that the business remains viable despite current challenges. “Mosaic Brands administration is a necessary process to reset operations and focus on sustainable growth,” Berchtold added.
KPMG Committed to Preserving Brand Value
David Hardy, a partner at KPMG’s Turnaround and Restructuring division, said their priority is to minimise disruptions. “We aim to stabilise Mosaic Brands’ operations while preserving the value of its core labels, including Rivers and Katies,” Hardy stated.
Workforce and Financial Impact
Mosaic Brands employs 250 people at its Sydney headquarters and 2,500 retail staff across Australia. The company’s entry into administration has placed these jobs at risk, pending the outcome of restructuring efforts.
The retailer’s financial struggles have been evident for years. In early 2020, Mosaic’s share price stood at $2.30. By February 2024, it had plummeted to 20 cents, and by August, shares were suspended at 3.6 cents.
Mosaic had hoped to resume trading on the ASX after filing its audited financial results. The company’s Annual General Meeting was initially planned for November 27.
Legal Challenges and Penalties
Mosaic Brands has faced legal troubles, with the ACCC taking action against the company for failing to deliver products on time. Mosaic paid $896,400 in penalties following infringement notices issued in 2021 and 2022.
Conclusion
The entry of Mosaic Brands into administration marks a critical turning point for the company. With brands like Rivers, Millers, Katies, and Noni B at its core, Mosaic aims to emerge stronger after restructuring. However, the outcome of this process will determine the future of its employees and store network.
For now, Mosaic Brands administration offers a path to reset its operations and refocus on growth. Whether this move will ensure long-term sustainability remains to be seen.