Noni B, Katies owner Mosaic Brands taps Erica Berchtold as new CEO

Mosaic Brands has turned to retail industry veteran Erica Berchtold as its new chief to continue the turnaround of the business.

Retail veteran Erica Berchtold was previously the boss of The Iconic and Rebel Sport. Picture: John Feder

The owner of fashion chains Millers, Katies and Noni B has turned to retail industry veteran Erica Berchtold to continue the turnaround of the business, with the former boss of The Iconic and Rebel Sport to take over the reins from retiring chief executive Scott Evans.

She comes to Mosaic Brands after it only recently emerged profitable again after ringing up tens of millions of dollars in losses, partly driven by the Covid-19 pandemic, with no dividends to shareholders since 2019 and a vastly smaller company, as store numbers have fallen by almost 50 per cent to around 740 stores.

On Thursday the slow march towards turning the embattled retailer around showed further progress as Mosaic, which also owns Rockmans, Rivers and Crossroads, posted a 121 per cent jump in its half-year net profit to $5.38m as revenue fell 10 per cent to $254.45m. In terms of continuing operations, its profits were up 38 per cent.

Mr Evans had been at the helm of Mosaic Brands for a decade, leading a transformation of the business, but then just as he was gathering momentum, he was sideswiped by the pandemic.

“Having put the group back on its feet operationally, strategically and financially, and having successfully navigated the group through Covid, Scott informed the board some months ago of his intention to retire,’ said Mosaic chairman Richard Facioni.

“This facilitates a seamless leadership transition to Erica, with Scott stepping down post the release of these results before working through a three-month handover period,” Mr Facioni said.

From left: Outgoing Mosaic Brands CEO Scott Evans, new CEO Erica Berchtold, Mosaic Brands chair Richard Facioni.

Ms Berchtold takes up her role from the posting of the results.

“Mosaic is operating in an increasingly dynamic and growing market. The huge shift to online in recent years also provides an enormous amount of data and information about those consumers’ shifting expectations and choices which will drive our strategy and direction,” Ms Berchtold said. “That’s why this is a really exciting opportunity and time to be leading a true omni-channel retailer. Low price is also not the antithesis of style. I will be looking to amplify the pride in our brands and the people behind them, in providing affordable fashion for all.”

Her two largest shareholders are investment house Alceon and crafts and homewares retail giant Spotlight. Alceon has a 19.44 per cent stake and Spotlight 19.66 per cent.

Mosaic Brands has had a torrid few years since the outbreak of Covid-19, which saw its stores shuttered. Customers of some of its retail brands, which skew to an older demographic, were wary of returning to the physical stores after the pandemic.

In 2022 it swung to a loss of $11.15m. With the impact of profit warnings, no dividends and a soft trading environment its shares have collapsed by 95 per cent since just before Covid-19 emerged.

Reflecting on the latest results, Mr Evans said shoppers at his fashion stores were “feeling the pinch” of cost of living pressures.

“I think consumers are smarter with their spend – you are seeing that across the whole market – and discounting has increased,” Mr Evans.

“But I don’t see it as a cliff. The outlook a year ago from everyone was that the world is going to end with interest rates and inflation being what it was, that we are all heading for this big train smash. That definitely hasn’t happened but it has become slower and become more difficult, with higher discounts.

“It slowed but it didn’t stop, which is good.”

Mosaic Brands expect second half sales to be in line with the first half.

Originally published as Noni B, Katies owner Mosaic Brands taps Erica Berchtold as new CEO