By Jessica Yun
Mosaic Brands, the company behind budget fashion brands Noni B, Rivers, Katies and Millers, says it will vigorously defend a Federal Court lawsuit brought by the consumer watchdog for allegedly failing to meet advertised delivery timeframes for several hundred thousand products that saw some customers pay for items that never arrived.
Between September 2021 and March 2022, Mosaic advertised on its brand websites that it would deliver clothes bought online between two and 17 business days from the purchase date. However, more than one-fifth of the orders were dispatched from Mosaic’s warehouses more than 20 days, and in some cases even 40 days, after customers bought them, the Australian Competition and Consumer Commission claims.
The parent company of budget fashion labes Noni B, Rivers, Katies, Millers and more has been caught in the ACCC’s crosshairs yet again.
Some customers paid for goods that weren’t delivered in a reasonable timeframe, or were not delivered at all, the ACCC said in a statement.
“The ACCC has received hundreds of complaints about Mosaic Brands in relation to delivery delays,” said ACCC Commissioner Liza Carver.
“Excessively late deliveries can be incredibly frustrating and inconvenient for consumers, especially if they decided to buy goods for a special occasion, such as Christmas, based on the advertised delivery times which were not met.”
Between September 2021 and October 2022, Mosaic Brands also stated that customers could only get a refund for faulty products within six months of buying the item, which the ACCC alleges misrepresents Australian law.
“If you buy a product or service and discover it is faulty, not of acceptable quality or does not match its description, you are entitled to a free repair and may also be entitled to a refund or replacement. These legal rights are called ‘consumer guarantees’ under the Australian Consumer Law, and they don’t have a specific expiry date,” said Carver.
The ACCC is seeking penalties, declarations, injunctions, costs and for Mosaic Brands to undertake a consumer law compliance program.
In a statement, the budget fashion retailer said the company would be vigorously defending the matter in court.
“Mosaic Brands believes the ACCC claim is flawed,” the company stated.
“For the last two years Mosaic Brands fulfilment rates have been over the government-mandated 95 per cent benchmark for Australia Post.”
This isn’t Mosaic Brands’ first entanglement with the regulator: in May 2021, the company paid $630,000 in penalties for advertising “health essential products” such as hand sanitiser that did not live up to their claims.
In September 2022, it paid $266,400 in penalties and copped two infringement notices from the ACCC for promoting a face mask by falsely claiming it was approved by the US Food and Drug Administration and carried a European certification (CE mark).
Mosaic also sold a hot water bottle through the Katies website that claimed to be “ACCC approved” when the watchdog does not endorse or approve any products.
“Consumer issues in domestic supply chains is a current ACCC enforcement priority,” Carver said.
Mosaic Brands last week announced that the former chief executive of The Iconic, Erica Berchtold, would takeover as chief executive of the fashion retailer from September.
The ASX-listed company, which also operates Millers, Rockmans, Autograph, W. Lane, Crossroads and Beme, was hit hard by COVID lockdowns and was slow to move to ecommerce. It has been executing a turnaround with a focus on controlling inventory, which saw its half-year net profits jump 38 per cent to $5.4 million. Sales dipped 10 per cent to $254.5 million.
Chairman Richard Facioni also owns the General Pants, SurfStitch, Ginger & Smart, National Geographic and Lego brands in Australia, which swung to a $5.2 million loss for the 2023 financial year.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.