Mosaic Brands, which runs numerous well-known Australian fashion chains, has entered voluntary administration.
The ASX-listed company, which employs about 3,000 staff across 700 stores in Australia and New Zealand, attempted to continue operating its Millers, Noni B, Rivers, and Katies chains.
At the same time, it tried to shut down its Rockmans, Autograph, Crossroads, W.Lane, and BeMe brands.
“The group’s leadership received the support of a significant majority of its commercial partners and was confident that the restructure would be in the best interests of all stakeholders, resulting in a more focused and financially stronger retailer,” a statement read.
But on Oct. 28, the company announced it was entering voluntary administration.
“Following recent attempts by the company to informally restructure its operations ... voluntary administration is now the most appropriate way to restructure the group,” the company announced in a statement.
It is reported that a “small number of parties” did not agree with the restructure and that a “commercially acceptable” outcome could not be reached with the competition watchdog.
The company will trade through the busy Christmas shopping period and has reassured the public it’s not all bad news.
“The board wishes to reiterate its belief to those who supported the restructure, to Mosaic’s customers and, most importantly, to Mosaic’s dedicated team across Australia, that the business has a long-term future,” the statement said.
Mosaic stumbled into trouble earlier this year as it migrated to a new supply chain and distribution system involving a new global partner, leaving it with little stock for Mother’s Day.
The company’s shares have been suspended from the ASX since Sept. 2 due to a delay in filing its 2023/24 financial report, originally due in August.
In February, Mosaic reported a net profit of $5.4 million, marking a 38 percent increase from the previous quarter.
However, it concluded the 2022/23 fiscal year with a net liability of $66 million (US$43.5 million), which included $39 million in debt, and $45 million in lease liabilities.
The annual report indicated that this situation “may cast significant doubt on the group’s ability to continue as a going concern.”
At that time, Mosaic’s board expressed optimism that the company would meet its debt obligations as they became due.
