FTI Consulting launches sale process for Mosaic Brands

Retail market experts say the brands most likely to survive a restructure would be department store Noni B, which had earlier reduced its footprint in an effort to become profitable. Picture: Steven Saphore/NCA NewsWire

Mosaic Brands’ voluntary administrator FTI Consulting has fired the starting gun on a sale process for parts of the embattled retailer, which may be wound up or sold off following its collapse.

First round bids are due for the business on November 15, and the understanding is that the insolvency firm has already fielded approached from parties interested in the business.

It comes after a flyer document was sent out on October 29 and information memorandums on November 6.

Parties will get access to a data room on November 18 before binding offers are due on December 6.

FTI Consulting and receiver KPMG will determine whether a potential sale will proceed five days after the final bid date.

DataRoom understands that there has been interest in the databases of certain brands in its stable, that could create an opportunity for a rival to attract more customers.

This column reported on Thursday that many in the market are questioning who the buyer is for the business and a liquidation for at least parts of the collapsed retailer looks likely, as a major restructure plan unfolds in the background that involves closing more than half its stores.

The first creditors meeting for Mosaic Brands was held on Thursday.

FTI Consulting has made an application to extend the covening period as part of the administration to enable the time before the second creditors meeting be extended to find buyers or enter into a Deed of Company Arrangement deal with lenders or landlords.

At the second meeting, administrators will consider whether the company should be liquidated, returned to directors or be part of a DOCA.

The group has $317m of total assets and $383m of liabilities while 408 trade creditors are owed $142m.

There are 205 landlords for about 676 stores owed about $35m, and 2801 employees owed about $7.2m.

Retail market experts say the brands most likely to survive a restructure would be department store Noni B, which had earlier reduced its footprint in an effort to become profitable, while the discounted menswear chain Rivers had been one of the better performing brands.

Mosaic Brands entered voluntary administration and receivership on October 28 after its future had been hanging in the balance for years.

Mosaic Brands’ lender Hillco is owed between $20m and $40m.

Also hurting Mosaic Brands have been disruptions relating to suppliers and inventory management.

It earlier said it would focus on its core brands, including Katies, Millers, Noni B and Rivers, and before its collapse had announced it would axe its fashion outlets Rockmans, Autograph, Crossroads, W.Lane and BeMe.