Major Australian fashion retailer Mosaic Brands has entered voluntary administration, putting thousands of jobs at risk.
The ASX-listed retailer, which owns iconic brands such as Katies, Millers, Noni B, Rivers and Autograph, announced its move into administration on Monday afternoon.
The company is Australia’s largest women’s fashion retail group, employing more than 4,000 people in more than 700 stores nationwide.
“Following the company’s recent attempts to informally restructure its operations, Mosaic’s board has determined that voluntary administration is now the most appropriate way to restructure the group,” the company said.
The company has appointed Vaughan Strawbridge, Kathryn Evans, Kate Warwick and David McGrath of FTI Consulting as administrators.
Mosaic’s senior secured lender has appointed KMPG as receiver and manager to work alongside the administrators in the restructuring process.
The administration process means that control of Mosaic will pass to FTI Consulting, who will assess the company’s accounts and determine whether it can be restructured to continue trading or whether it is in the best interests of creditors and employees to go into liquidation.
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 retail group, employing more than 4,000 people in more than 700 stores nationwide.
The announcement comes just weeks after Mosaic announced it would close five of its major retail franchise chains.
The Rockmans, Autograph, Crossroads, W.Lane and BeMe brands, including their stores and websites, will close, Mosaic CEO Erica Berchtold confirmed in October.
Berchtold said the closed brands had “become marginal and non-essential” and closing them would allow the company to focus on the remaining five.
At the time, the group stated it was focused on the Millers, Noni B, Rivers and Katies brands. However, the future of these brands is now uncertain.
Professor Gary Mortimer, a retail expert at the Queensland University of Technology Business School, said Mosaic Brands made the mistake of “essentially creating multiple brands to market to exactly the same audience: middle-aged and middle-class women.” .
Mosaic to close multiple businesses, including Rockmans stores (pictured)
“If you walk into a 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,” he told News Corp.
Professor Mortimer compared the overlap to what Kmart and Target, both locally owned by Wesfarmers, were doing, often competing with each other.
Mosaic currently has a total of around 763 stores in Australia and New Zealand, but has been trying to focus more on the large Rivers megastores in regional Australia as part of its “BIG strategy”.