The full liquidation of Mosaic Brands Group sparks warning bells across the retail industry, as March shapes up to be decision-making time for lenders to other struggling retail chains.
KPMG announced on Wednesday that Millers and Noni B would close, resulting in 933 job losses and 252 store closures across Australia and New Zealand.
This is in addition to the menswear brand Rivers, which employed about 650 people, Katies, Autograph and Crossroads, which were all part of the Mosaic Brands stable.
DataRoom in November flagged that a total liquidation was on the cards for the business as there was limited buyer interest.
Apparel groups in the market say while Black Friday sales were strong and there was a reasonable Christmas trading period, January was exceptionally quiet.
The Body Shop in New Zealand collapsed into administration after Christmas so will be closely watched here after its UK parent company collapsed last year.
Typically, lenders let struggling retailers see out Christmas before they make any big decisions and then make a decision on whether to call in loans several weeks after they are back from their holiday break.
In the case of Mosaic Brands, part of the challenge was that the brands were outdated and less relevant to shoppers. But also hitting the industry hard is that shops are no longer just competing with their bricks-and-mortar competitors but their businesses are being eroded by online retailers like Temu and also the Facebook marketplace.
Mosaic Brands entered receivership in October with 700 stores and more than a thousand employees.
Receivers cut 160 stores in December and slashed 500 jobs as they wound down Katies.
The sale process run through voluntary administrator FTI Consulting drew limited buyer interest, although former Mosaic Brands chair Richard Facioni – who runs ACTA Capital – was thought to have been willing to snap up Noni B and Millers.
“Despite the best efforts of all parties, we have been unable to achieve a sale of any of the brands within the Mosaic portfolio,” KPMG partner David Hardy said.
“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.”