A major Australian retailer is seeking refinancing advice from one of the Big Four accounting firms, raising fears about its future.
Mosaic Brands, owner of budget clothing brands Millers, Katies, Noni B and Rockmans, announced a temporary pause in its ASX trading on Wednesday.
It reportedly employs 4,000 people and has approximately 700 stores across Australia.
The company’s share price fell 13 percent in the wake of the decision, as it revealed it had appointed Deloitte to advise it on “refinancing considerations.”
The parent company closed hundreds of stores last year, but its problems appear to be getting worse.
It is also facing complaints from overseas clothing suppliers, some of whom say they have not received payments for two years. The claims are being investigated by the Australian Competition and Consumer Commission.
The board of directors said in a statement that the company “has suffered operational issues in recent months that have negatively impacted trading.”
Mosaic Brands, owner of budget clothing brands Millers, Katies, Noni B and Rockmans, announced a temporary pause in trading on the ASX on Wednesday.
It reportedly employs 4,000 people and has approximately 700 stores across Australia.
Directors, management and their advisors are working on these matters and the Group anticipates a recovery in its business performance during the course of the first half of FY25 once these operational issues are resolved,’ it said.
The statement added: “The Group confirms that during this time, Deloitte has been advising the company on refinancing considerations that have been previously announced to the market.”
Professor Gary Mortimer, a retail expert at Queensland University of Technology’s Business School, said Mosaic Brands made the mistake of “essentially creating multiple brands to market to exactly the same audience – middle-aged, middle-class women”.
“All these women shop at the same stores, so they are cannibalising their own market,” Professor Mortimer said. news.com.au.
“If you walk into a shopping mall, you’ll find at least two, if not three, of those brands competing for the same customer and that just doubles and triples the cost of doing business.”
Professor Mortimer compared the approach to the problem faced by Kmart and Target several years ago when they were competing with two other discounters owned by Wesfarmers.