Mosaic Manufacturers, the parent company behind Australian clothing brands Rivers, Millers and Katies, has entered voluntary administration.
The ASX-listed company, which operates more than 700 stores and employs about 3,000 people, issued a statement on Monday confirming the decision by its board of directors.
“Following recent attempts by the company to informally restructure its operations…voluntary administration is now the most appropriate way to restructure the group,” the statement said.
The company discontinued five of its signature brands in September and closed stores as it tried to put its finances on solid footing.
Mosaic said the closure of the Rockmans, Autograph, Crossroads, W.Lane and BeMe brands would allow it to focus on Millers, Noni B, Rivers and Katies, and a standalone online marketplace.
“The group's leadership was supported by a significant majority of its business partners and was confident that the restructuring would be in the best interests of all stakeholders, resulting in a more focused and financially stronger retailer,” the statement read. .
But on Monday the board said a “small number of parties” had not agreed to the restructuring and that a “commercially acceptable” result could not be reached with the competition watchdog.
The company said it would continue to operate and focus on “the key Christmas and holiday trading period.”
“The board wishes to reiterate its belief to those who supported the restructuring, to Mosaic's customers and, most importantly, to the dedicated Mosaic team across Australia, that the business has a long-term future,” he said.
The group has around 763 stores in Australia and New Zealand, but has been trying to focus more on the large Rivers megastores in regional Australia as part of its “BIG strategy”.
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Mosaic faced problems earlier this year when it migrated to a new, fully integrated supply chain and distribution system with a new entero partner, and had little inventory on hand for the key Mother's Day trading period.
The company's shares have been suspended on the ASX since September 2 due to a delay in the submission of its 2023/24 financial report, which was due in August.
In February, Mosaic said it posted a net profit of $5.4 million, up 38% from the previous quarter.
But it also ended 2022/23 with a net liability position of $66 million, including $39 million in debt and $45 million in lease liabilities, which, according to its annual report, “may cast significant doubt on the ability of the group to continue as a going concern.”
At the time, Mosaic's board of directors expressed optimism that the company would be able to pay its debts when they fell due.
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