Mosaic Brands’ to close all Katies stores by January after voluntary administration

Receivers overseeing the embattled Mosaic Brands retail group will close 160 stores and kill off the once popular Katies chain within weeks.

All Katies stores across Australia will shut in January following its parent company entering into voluntary administration in October. Picture: Supplied.

Almost 500 employees of embattled Australian fashion and apparel empire, Mosaic Brands, will lose their jobs by mid-January, as the receivers and managers of the group will close 160 stores and kill off the once popular Katies brand that started in South Australia.

All 80 Katies stores will be closed under the decision made by KPMG Australia after the company entered into voluntary administration in October, while 80 more stores across the Millers, Rivers and Noni B brands will also be shut.

Impacted employees and landlords will be notified as soon as possible.

The decision was made following a review of the performance of Katies as a brand, and the wider store network. The stores identified to close have been loss making resulting in the decision to close them in January.

Katies opened its first store in Rundle Street Mall in Adelaide in 1954.

Approximately 480 store employees will be impacted by the planned closures which are due to occur by mid-January 2025, KPMG said.

“The receivers and managers would like to thank all employees, particularly those whose tenure is coming to an end, for their commitment and support through the receivership process.”

The store closures do not impact the sale process for Mosaic Brands Group, being run by FTI Consulting in their capacity as voluntary administrators. Following submissions of non-binding indicative offers in late November, short listed parties have been undertaking due diligence on the group with the deadline for binding offers due by the end of the month.

Since the date of appointment, KPMG said the receivers and managers have stabilised operations, continuing the trade of the businesses of the group while engaging with suppliers.

A number of stores operating under the Rivers brand will also shut. Picture: Supplied.

Mosaic has about 2700 employees and more than 700 stores nationwide, but took steps prior to entering into voluntary administration to downsize its operations to stay afloat. On September 30, it exited the Rockmans, Autograph, Crossroads, W.Lane and BeMe brands and closed some 200 stores as it moved to focus on “five core growth brands”.

Mosaic chief executive Erica Berchtold said in October that the company could reverse its flagging fortunes by reshaping the business with a clearly defined market proposition for its target customers, and employees, that we can be proud of,” she said on Monday.

“Our priority is to accelerate the rationalisation plans we have in place to focus on the core brands to service current and attract new customers across metropolitan and importantly regional Australia,” she said at the time.

Retailers have been under the pump as household budgets are stretched thing amid a surge in mortgage and rental payments coupled with more expensive utilities and essential items such as food. This has led to a surge in insolvency appointments, which surged 40 per cent in the 2024 financial year to a record high of 11,049 – surpassing the peak of the Global Financial Crisis – with the latest September quarter 45 per cent above the same period in 2023.

Voluntary administration appointments rose 14.5 per cent in the 2024 financial year to 1492, and 120 per cent from 2023. In the September quarter, there has been a 5 per cent uplift to 392.

Godfreys, a seller of vacuum cleaners for almost 100 years collapsed in January and closed for good in May, while the voluntary administration of Booktopia is estimated to have cost up to $900,000 by McGrathNicol before digiDirect acquired it. ASX-listed Beston Global Food Company appointed KPMG in September to oversee its voluntary administration last month, amid mounting debt.

Mosaic appointed Vaughan Strawbridge, Kathryn Evans, Kate Warwick and David McGrath of FTI Consulting as joint and several administrators of the group on October 28 as part of the voluntary administration process. KPMG David Hardy, Gayle Dickerson, Ryan Eagle and Amanda Coneyworth were appointed as receivers and managers to work alongside the administrators through the restructure process.

Shares in the company fell in the 12 months prior to being suspended from 10c to 3.6c to give the business a market capitalisation of just $6.4m.