Australian clothing giant Mosaic Brands has gone bankrupt due to debt of almost $250 million.
The company entered voluntary administration on October 28 and a newly published report from the external administrators shows a long list of creditors.
KPMG has been appointed receiver and administrator and is looking to sell the business.
More than 300 employees are owed an undisclosed amount.
Mosaic owes more than $30 million to 23 Bangladeshi textile factories. Workers earning a few hundred dollars a month told ABC they were worried about feeding their families.
Before entering administration, Mosaic announced it would close its Autograph, BeMe, Crossroads, Rockmans and W.Lane entities.
Those closures were supposed to pave the way for further investment in its other brands Katies, Millers, Noni B and Rivers. In total, Mosaic Brands had more than 700 stores and 10 online stores.
But an announcement made to the ASX in October shows the restructuring was unsuccessful.
The future of Mosaic’s brands, including Noni B, is uncertain. Image: Supplied
The list of creditors of the Mosaic brand. Image: FTI Consulting
“Following recent attempts by the company to informally restructure its operations, Mosaic’s board of directors has determined that voluntary administration is now the most appropriate way to restructure the Group.”
A “significant majority” of secured lenders, suppliers, service providers, landlords and the Australian Competition and Consumer Commission supported a restructuring, but “a small number” rejected the restructuring proposal and Mosaic was unable to reach a “commercially acceptable resolution.” ” with the consumer. watchdog, reads the ASX announcement.
The Mosaic group will remain trading, work on a wider restructuring plan and focus on the “key Christmas and holiday trading period”.
“The board wishes to reiterate its belief to those who supported the restructuring, to Mosaic’s customers and, most importantly, to the dedicated Mosaic team across Australia, that the business has a long-term future,” the announcement continued.
Mosaic Brands Limited owes around $249 million to 171 creditors, although this figure could change as administrators review the books.
The administrators’ report says KPMG has more than 12 buyers interested in the business. Administrators are confident that some staff can be redeployed and “hope to be able to fully satisfy employee rights.”
Staff from one of Mosaic’s suppliers, Hydroxide Knitwear. Bangladeshi textile companies are owed about $30 million. Photo: facebook
The Bangladesh Garment Manufacturers and Exporters Association told ABC that Mosaic’s conduct sets a bad precedent for the industry.
A spokesperson for the association told the ABC they wrote to the Australian High Commission about Mosaic’s non-payment and the association was asked to seek independent legal advice.
Oxfam Australia said the business collapse highlighted systemic inequalities.
“These workers are already receiving poverty wages of around $6 a day as minimum wage,” Oxfam Australia advocacy leader Sarah Rogan told the ABC.
“For Mosaic, not paying for orders already placed means they have essentially worked for free.”