By Cindy Yin and Jessica Yun
Managers for embattled fashion retailer Mosaic Brands were unable to find a buyer for the budget clothing business, which will result in remaining brands Noni B and Millers shut down, resulting in the closure of 252 stores and 933 job losses.
It comes after last week’s announcement that 136 Rivers stores and 80 Katies stores – which were also part of Mosaic Brands – will be shut nationwide.
Mosaic’s remaining brands, Noni B and Millers, will shut down, meaning all nine of its brands have been axed.
Receivers and managers for the failed retailer from KPMG made the announcement on Wednesday on behalf of Mosaic, which once had almost 3000 employees and 700 stores across Australia.
“Despite the best efforts of all parties, we have been unable to achieve a sale of any of the brands within the Mosaic portfolio,” said KPMG partner David Hardy.
“As a result, all stores in the Mosaic Brands Group will be wound down over the coming months. We expect all stores will be closed by mid-April.”
The exact timing of individual store closures will vary and is dependent on stock levels and sell through.
Mosaic fell into administration in late October, a month after chief executive Erica Berchtold axed five of its brands Rockmans, Autograph, Crossroads, W. Lane and BeMe.
The whole group, which operates nine brands is millions in debt, owes creditors at least $740 million, according to minutes from a creditor’s meeting held in November.
A Rockmans employee who had been made redundant said at the creditor’s meeting they had been told their redundancy payment was on hold, and that annual leave and long service leave would not be paid, meeting minutes show. The chair of the meeting said this was a matter for the receivers.
There will be a second creditor’s meeting held where employee entitlements and next steps will be decided, administrators FTI Consulting said.
“The voluntary administrators’ focus is now on finalising their investigations and report to creditors. As the receivers have indicated all stores will likely be closed during April, the second meeting of creditors is likely to be called and held in May,” an FTI Consulting spokesperson said.
Mosaic’s slide into administration last year came after a proposed restructuring of the company was blocked by a “small number” of parties, including its senior secured lender.
The company allegedly did not have directors and officers insurance, this masthead reported last year, citing two sources who could not be identified for confidentiality reasons.
Former suppliers came forward to this masthead last year to detail millions of dollars owed, where Mosaic sold products in-store and banked proceeds without paying for them. Berchtold attempted to enter negotiations with Mosaic’s global suppliers by asking them to accept terms where they would be paid as little as one-third of what they were owed.
At least 11 Bangladeshi suppliers were understood to be owed around $US15 million ($23.9 million), this masthead reported last year.
Receivers KPMG declined to comment.
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