Financial struggles are compelling one of Australia’s largest fashion retailers, Mosaic Brands to close over 200 stores and shut down five of its brands. The ASX-listed company plans to shut down its Rockmans, Autograph, Crossroads, W.Lane, and BeMe brands, affecting both stores and online platforms.
According to Erica Berchtold, CEO, Mosaic Brands, the decision to cut the brand portfolio will help the company simplify operations and refocus on its five core brands including Millers, Noni B, Rivers, Katies, and a stand-alone Mosaic online marketplace. The company is also working to reassign affected employees within these remaining brands.
The retailer has been facing challenges for some time, including the closure of hundreds of stores last year and being suspended from trading on the ASX after missing a key deadline for reporting its annual results. Mosaic also engaged Deloitte for advice on refinancing options. Additionally, a technology issue before Mother’s Day and the impact of the cost-of-living crisis severely affected its revenue in the fourth quarter.
Professor Gary Mortimer from Queensland University of Technology previously noted that Mosaic’s brands were cannibalising their own market, as many catered to the same demographic: middle-aged, middle-class women. He highlighted the inefficiency of having multiple brands targeting the same audience within the same shopping centers.
Mosaic has faced inconsistent financial performance in recent years. It reported a $170.5 million loss in 2020, an $11.5 million loss in 2022, and a small profit of $1.2 million in 2023, despite significant revenue. The company also dealt with a $630,000 fine in 2021 for making misleading claims about its products' COVID-19 protection.
The Australian Competition and Consumer Commission has launched a federal court case against Mosaic for failing to deliver orders as promised, which the company is contesting.
