All Katies stores will close, and almost 500 employees of embattled budget retailer Mosaic Brands will lose their jobs by mid-January as the company – placed into administration in October with debts of at least $249 million – continues to search for a buyer.
Mosaic, which once counted almost 3000 employees and 700 stores across Australia, announced via its receivers KPMG on Tuesday that all of its 80 Katies stores would be shut, while 80 additional stores across the Millers, Rivers and Noni B brands would also be closed. KPMG estimated 480 employees will lose their jobs as a result of the move.
Katies and Rockmans have been given the axe, while 80 Rivers, Noni B and Millers stores will be closed in a bid to help Mosaic Brands find a buyer.
“The receivers and managers of the Mosaic Brands Group have made the difficult decision to commence a store consolidation program which will impact approximately 160 stores across the group’s portfolio,” KPMG said in a statement.
“Impacted employees and landlords will be notified as soon as possible. The decision to undertake the store consolidation program has not been taken lightly.”
Since being appointed receivers, KPMG has worked to stabilise Mosaic’s operations and help the company to continue trading, included working with suppliers to secure stock for the Black Friday and Christmas periods.
The end of Katies came after prospective buyers identified the women’s clothing brand as uneconomical, saying its size and trading performance would present difficulties for future owners of Mosaic.
The Millers, Rivers and Noni B stores that will be wound down by January made consistent losses.
Mosaic’s clothing brands have continued to trade since the company fell into administration, after a proposed restructure of the company was blocked by a “small number” of parties, including its senior secured lender.
It followed months of renegotiations with suppliers and landlords to keep the business afloat, and the dumping of several brands including Rockmans, Autograph and Crossroads.
Mosaic described Katies in October as one of the “core brands” it hoped would become a future focus of the company following the appointment of administrators, which they believed would also help to “right-size the store network to ensure the ongoing success of the business”.
A handful of prospective buyers have expressed interest to administrators FTI Consulting, which expects binding takeover offers to be submitted by the end of December. Additional store closures and job cuts haven’t been ruled out, though further moves to consolidate the brand’s portfolio won’t occur before all formal offers are reviewed by FTI.
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