Mosaic Brands axes 200 of its branded outlets as it moves to avoid a collapse

Five brands, including Rockmans and Autograph, and 200 outlets will be closed permanently by embattled retailer Mosaic Brands as it seeks to avoid a financial collapse.

Mosaic Brands will close more than 200 stores, however its Noni B outlets will survive the cull. Picture: Steven Saphore

Embattled apparel retailer Mosaic Brands will close more than 200 stores and shut five of its brands in a bid to avoid financial collapse as the retailers sector comes under mounting pressure.

One of Australia’s biggest retailers, the ASX-listed Mosaic will axe its fashion outlets Rockmans, Autograph, Crossroads, W.Lane and BeMe brands, including all stores and websites. It is not yet known how many jobs will be lost.

Mosaic chief executive Erica Berchtold said the move was part of a broader effort to simplify the retailer’s portfolio and focus on its more successful brands including Katies, Noni B, Rivers and Millers.

“Each of those core brands will have a clearly differentiated market proposition, target customer, price point and product range,” she said.

“While the operational details of the rationalisation plan, including store closures, continue to be worked through, we will seek to minimise the impact on our team, including where possible reassigning impacted team members into roles within the five core brands.”

Mosaic has 231 outlets spanning those brands across Australia. Autograph has 49 stores, Rockmans 150 and W.Lane 32.

The news comes as Australia’s national retail figures for August reveal a slightly higher-than-expected month-on-month lift of 0.7 per cent, offering a brief reprieve for struggling retailers in what was put down to warmer weather.

Australian Bureau of Statistics figures released on Tuesday also showed year-on-year growth of 3.1 per cent, outstripping July figures of 2.3 per cent.

Financial markets had tipped an uptick of 0.4 per cent, largely due to an earlier-than-usual Father’s Day, after July figures flatlined month on month.

Commonwealth Bank head of Australian economics Gareth Aird said while the spending data was strong, the upside surprise was driven by temporary factors supported by spring purchases of items such as clothing, camping goods and outdoor equipment being brought forward.

“We are inclined to put more weight on the timing of Father’s Day (September 1) in boosting spending across a range of items in August by more than usual,” he said.

National Retail Association interim chief executive Lindsay Carroll said the healthy August figures was a healthy result, but one month of good sales was not enough for businesses to recover from a challenging past couple of years. “Business owners need every win they can get in the lead-up to Christmas,” Ms Carroll said.

A deterioration in the consumer spending coupled with higher energy, wages and goods has caught a number of discretionary business in the crossfire, including online bookseller Booktopia, while Godfreys Group closed in May after almost 100 years of selling vacuum cleaners.

All Rockmans outlets will close as part of plans announced by Mosaic. Picture: Scott Fletcher

Australian ­Securities and Investments Commission data showed retail trade insolvency appointments surged by 42.2 per cent to 768 in the 2024 financial year.

Hospitality rose even faster, up 50 per cent to 1667. In the first two months of the new fiscal period, hospitality appoints are up 96 per cent to 452.

Collins Foods, which operates 279 KFC stores across Australia, issued a profit warning in the face of slumping fried chicken sales to further highlight the cost of living crisis now playing out.

The company on Tuesday announced former KMD Brands boss Xavier Simonet would be tasked to lead to turnaround after he was named its new CEO.

Mosaic Brands, which last traded at 3.6c, has been suspended from ASX trading since August as it remains in safe harbour protection, with Deloitte assisting with a refinancing. It has delayed filing its financial accounts to the ASX at least twice as it attempts to manage its costs and loss of sales. Mosaic said it continued to finalise its FY24 annual results as it attributed the delay to events that occurred after the reporting period.

Originally published as Mosaic Brands axes 200 of its branded outlets as it moves to avoid a collapse