Receivers and voluntary administrators have been appointed to manage Mosaic Brands after the failure of recent internal attempts to restructure the company due to operational difficulties.
The listed fashion retailer has appointed KPMG’s David Hardy, Gayle Dickerson, Ryan Eagle and Amanda Coneyworth as receivers and managers and Vaughan Strawbridge, Kathryn Evans, Kate Warwick and David McGrath of FTI Consulting as joint and several administrators.
Mosaic Brands said it arrived with the decision after failing to receive the support of a “small number of parties” for its proposed restructuring.
It also failed to negotiate a commercial outcome with the stakeholders and did not reach a commercially acceptable resolution for the Australian Competition and Consumer Commission (ACCC).
“The board wishes to reiterate its belief to those who supported the restructure, to Mosaic’s customers and, most importantly, to Mosaic’s dedicated team across Australia, that the business has a long-term future,” said the group.
“With the group continuing to trade, management intends to progress its brand rationalisation and wider restructuring plan and to focus on the key Christmas and holiday trading period.”
The receivers will oversee Mosaic’s trading operations, while the administrators will seek offers to recapitalise or acquire the Mosaic Brands Group.
Mosaic Brands CEO Erica Berchtold said the move is necessary to accelerate its plans to focus on the core brands, namely Katies, Millers, Noni B and Rivers.
“Mosaic Brands continues to be an exciting opportunity to reshape a business with a clearly defined market proposition for its target customers and employees that we can be proud of,” said Berchtold.
“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.”
Last month, the fashion retailer said it would wind down five of its brands to focus on its other five businesses as it struggles to remain afloat due to operational issues.
These brands are Rockmans, Autograph, Crossroads, W Lane and BeMe. Their closure is part of what Berchtold called a ‘Focus on Core’ plan.
KPMG Australia turnaround and restructuring partner David Hardy said the group’s portfolio of fashion labels sold clothing and products much loved by generations of Australians.
“We will be seeking to stabilise the operations of Mosaic to preserve the underlying value of the business while endeavouring to serve its customers, with support from its employees and suppliers to minimise business interruption.”
