)
The receivers to fashion retailer Mosaic Brands (ASX: MOZ) will close 160 stores across the group by mid-January putting the company’s iconic brands comprising Katies, Millers, Rivers and Noni B all in the firing line.
However, the move sounds the death knell for Katies with all 80 stores in the chain set to close, ending a near 70-year history for the brand in Australia in a shock move just two months after the company described the business as one of its core brands.
The receivers are also shutting down another 80 stores across the Millers, Rivers, and Noni B brands with the latest store closures coming on the heels of about 200 earlier store exits announced by Mosaic Brands ahead of the company appointing voluntary administrators in October.
The latest shutdown of 160 outlets is expected to affect 480 staff who along with the landlords impacted by the announcement will be notified by the receivers "as soon as possible”.
“The decision to undertake the store consolidation program has not been taken lightly,” say the receivers in a statement.
“Since the date of appointment, the receivers and managers have stabilised operations, continuing to the trade the businesses of the group while engaging with suppliers to release stock for the crucial Black Friday and Christmas trading periods.
“The receivers and managers would like to thank all employees, particularly those whose tenure is coming to an end, for their commitment and support through the receivership process.”
On 28 October, Mosaic Brands initially appointed Vaughan Strawbridge, Kathryn Evans, Kate Warwick and David McGrath, of FTI Consulting, as voluntary administrators to pursue a restructure of the business in the face of a challenging retail environment.
The company’s senior lenders immediately appointed KPMG’s David Hardy, Gayle Dickerson, Ryan Eagle and Amanda Coneyworth as receivers and managers to work with the administrators through the restructure process.
The receivers say the decision to close all Katies stores followed a review of the performance of the brand and the wider store network.
“The stores identified to close have been loss making, resulting in the decision to close them in January,” the receivers say.
However, despite a slimmed down Mosaic Brands store network, the receivers point out that this will not impact the sale process currently under way for the Mosaic Brands business, which is being led by the voluntary administrators from FTI Consulting.
“Following submissions of non-binding indicative offers in late November, short-listed parties have been undertaking due diligence on the group,” say the receivers.
“Due to the ongoing due diligence and discussions with interested parties, FTI Consulting have advised parties that the deadline for binding offers has been extended until end of December 2024.”
Katies has been part of the Australian fashion retail scene since 1956 and it joins former Mosaic Brands operations Rockmans, Autograph and W.Lane among the brands to be closed down by the group this year.
Rockmans is another brand that was a staple for women’s fashion in Australia for generations, since the business was established with a single store in Melbourne by the Rockman brothers in 1930.
Mosaic Brands has also previously announced the winding down of its pure-play digital platforms Crossroads and BeMe in its bid to shed non-core business assets.
Shares in Mosaic Brands have been suspended since September after the company failed to lodge its FY24 financial results on the ASX by the end of August.
The quarterly update released at the end of July revealed that the company faced working capital pressures due to a number of operational issues.
The company had indicated it would be reporting a trading and statutory loss for FY24 with EBIT tipped to be a loss of between $15 million and $20 million – a massive turnaround from the $13.1 million in earnings before interest and tax reported in the first half of the year.
)
