Mosaic Brands

Last updated

Mosaic Brands Limited
FormerlyNoni B Limited
Company type Public
ASX:  MOZ
IndustryRetail
Founded1977;47 years ago (1977)
FounderAlan Kindl
FateIn Receivership
Headquarters
Rosebery   OOjs UI icon edit-ltr-progressive.svg
,
Australia  OOjs UI icon edit-ltr-progressive.svg
Number of locations
715 stores (2024)
Key people
Erica Berchtold (CEO)
ProductsWomen's clothing
Brands
  • Millers
  • Rockmans
  • Noni B
  • Rivers
  • Katies
  • Autograph
  • Crossroads
  • W. Lane
  • Beme
Website mosaicbrandslimited.com.au

Mosaic Brands Limited is an Australian fashion retail company. It operates 715 stores across Australia under the brands Millers, Rockmans, Noni B, Rivers, Katies, Autograph, Crossroads, W. Lane and Beme. [1] The company's core market is women over the age of 50. [2] In 2024 it was placed into voluntary administration with administrators appointed from FTI Consulting and receivers and managers from KPMG [3] after not gaining approval on an emergency restructure. It announced it would wind down the Rockmans, Autograph, Crossroads, W.Lane and Beme brands, with receivers later winding down the Katies brand as part of extended store closures.

Contents

History

Mosaic Brands began as Noni B which was founded by Alan Kindl. Kindl had been a stockfeed chemist and was seeking a career change. When the opportunity came up in 1977, Kindl partnered with a friend to buy a women's fashion boutique in Belmont, New South Wales and another store nearby. [4]

By 1989, there was 38 Noni B stores in New South Wales and Victoria. Kindl's friend wanted to leave the business so Kindl purchased his stake in the company for $1.2 million. [4] In 2000, Noni B listed on the Australian Securities Exchange. [5]

Noni B store in Westfield Carousel Noni B, Westfield Carousel.jpg
Noni B store in Westfield Carousel

In 2003, Noni established Liz Jordan, a new brand aimed at younger, more upmarket customers. [5] Liz Jordan products were sold in dedicated stores and in many Noni B stores. [4] Although Noni B planned on moving upmarket with Liz Jordan, its products struggled to command higher prices because they were sold in Noni B stores. [6] In August 2006, Noni B launched a new concept called La Voca, aimed at a similar demographic to Liz Jordan but with greater separation from Noni B. [7] At the same time, the company closed its Liz Jordan stores, rebranding them as Noni B or La Voca stores. Liz Jordan products continued to be sold in Noni B stores. [6] In June 2008, Noni shut down the loss making La Voca venture. About half of the 19 La Voca stores were rebranded to Noni B stores. [8]

In September 2014, private investment firm Alceon Group attempted a takeover of Noni B. The Kindl family sold their 42 per cent stake in Noni B to the firm. [9] However, Alceon was blocked from taking the company private when Gannet Capital acquired a 12 per cent stake in Noni B. [10] [11] In November 2014, Scott Evans was appointed CEO of Noni B. [12] In December 2014, Noni B bought two brands—Queenspark and Events—for $675,000. [13]

Growth

In August 2016, the company purchased Pretty Girl Fashion Group from Consolidated Press Holdings for at least $75 million in cash and shares. Pretty Girl Fashion Group had around 370 stores under the brands Table Eight, Rockmans, BeMe, and W. Lane. [14] In July 2018, Noni B purchased five brands—Autograph, Crossroads, Katies, Millers and Rivers—from Specialty Fashion Group for $31 million. [15]

Millers store in Maddington Central Millers, Maddington Central.jpg
Millers store in Maddington Central

In November 2019, Noni B purchased a 50.1 per cent stake in New Zealand multi-channel retailer EziBuy from Alceon Group in a $1 peppercorn sale. [16] That month, Noni B Limited also changed its name to Mosaic Brands. [17]

Decline and non-compliance

The onset of the COVID-19 pandemic in Australia led Mosaic to temporarily closed its 1379 stores and stand down 6800 staff in March 2020. [18] Between the start of the pandemic and September 2021, the company closed 288 stores. [19] The company announced a $32 million capital raise in September 2021 to help it stay afloat until pandemic restrictions eased. [20]

In May 2021, the company was fined $630,000 by the Australian Competition and Consumer Commission (ACCC) for making false or misleading claims pertaining to hand sanitiser and face mask products. [21] The company was also fined $266,400 in September 2022 for false claims regarding two other products. Mosaic Brands said the two products were from "third-party sellers" and "neither product was ever purchased by a customer". [22]

Mosaic purchased the remaining 49.9 per cent stake in EziBuy in October 2021 for $11 million. [23] In April 2023, Mosaic placed EziBuy into administration, with plans to restructure it. [24] With this the remaining stores were closed down and the retailer went online only. [25] The brand entered liquidation in July 2023 with creditors owed more than $100 million. [26] [27]

In May 2023, Mosaic was fined $29,000 after it pleaded guilty to 324 offences of underpaying long service to workers. The court found that while the underpayments were not deliberate, they occurred due to a lack of care and diligence. [1]

Erica Berchtold was appointed CEO of Mosaic Brands in February 2024. [28] The following month, the ACCC brought proceedings against the company for allegedly making false or misleading representations to consumers about delivery timeframes and their rights regarding refunds for faulty products. [29]

Rescue plan and receivership

In September 2024, the company announced it would wind down its Rockmans, Autograph, Crossroads, W.Lane and Beme brands. [30] The company had previously also began closing or centralising stores mostly in rural areas. [31] In late October 2024, Mosaic Brands was placed into voluntary administration, [3] after failing to convince all stakeholders of the restructure, principally the senior lender, and citing reduced spending, structural complexity and massive debts to suppliers. The company appointed administrators from FTI Consulting, with KPMG appointed receivers and managers by the creditor. The company has started focusing on the timely holiday period and slashed prices while preparing for a creditors' meeting. [31]

The creditors' meeting has revealed an estimate of $240 million in debt from a laundry list of creditors, but the true extent has not been disclosed and some debts overlap. [32] A sale process is underway, with a dozen interested parties and hints at breakups and resumed store closures, staving a complete receivership and shutdown. The receivership has also left Bangladeshi suppliers out of pocket and owing unpaid wages (but were crammed down in previous arrangements [3] ), and brought shame on the industry from Oxfam and Bangladesh Garment Manufacturers and Exporters Association with accusations of exploitation and inadventent free labour, and fears of seamstresses going hungry. [33] [34] Administrators have tried to assure creditors that entitlements shall be paid in full, despite the receivership (which usually prioritises the appointee) and heavy debt.

Administrators alledge the company may have been under safe harbour as early as late 2022. [35] It was pressured to disclose that the company was under safe harbour in August 2024. [36]

On 10 December, receivers have announced that the Katies brand will also be dissolved and an even further 80 other stores will close down in January, affecting 480 employees. [37] [38] Administrators have been meanwhile trying to sell the group, with the deadline extended from 13 [35] to end December. [38]

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References

  1. 1 2 Smith, Alexandra (29 May 2023). "Fashion giant guilty of hundreds of underpayment offences". The Sydney Morning Herald. Retrieved 5 March 2024.
  2. ↑ Mitchell, Sue (26 May 2021). "Mosaic Brands back in growth after closing stores". Australian Financial Review . Retrieved 6 March 2024.
  3. 1 2 3 Hyland, Anne (28 October 2024). "Owner of Katies, Noni B and Millers goes into administration". The Sydney Morning Herald. Retrieved 28 October 2024.
  4. 1 2 3 Walker, Jacqui (8 September 2005). "Family in fashion". Australian Financial Review. Retrieved 5 March 2024.
  5. 1 2 Tyndall, Fiona (28 June 2003). "Family's retail brand spawns a daughter". Australian Financial Review. Retrieved 5 March 2024.
  6. 1 2 Evans, Michael (17 August 2006). "Noni B chief has designs on DJs' shoppers". Sydney Morning Herald . Retrieved 5 March 2024.
  7. ↑ Mitchell, Sue (20 August 2007). "Noni B tries on a young new market". Australian Financial Review. Retrieved 5 March 2024.
  8. ↑ "Noni B to restructure La Voca stores". The Sydney Morning Herald. 18 June 2008. Retrieved 5 March 2024.
  9. ↑ Mitchell, Sue (3 September 2014). "Noni B founders to accept Alceon takeover bid". Australian Financial Review. Retrieved 5 March 2024.
  10. ↑ Mitchell, Sue (27 October 2015). "Noni B returns to profit on cost cuts, store closures". The Sydney Morning Herald. Retrieved 5 March 2024.
  11. ↑ Mitchell, Sue (28 October 2014). "Noni B gets new chief as Alceon takeover becomes unconditional". Australian Financial Review. Retrieved 5 March 2024.
  12. ↑ "New CEO for retailer Noni B". The Sydney Morning Herald. 3 November 2014. Retrieved 5 March 2024.
  13. ↑ "Noni B snapping up women's fashion brands". SBS News. Retrieved 5 March 2024.
  14. ↑ Mitchell, Sue (3 August 2016). "Noni B buys James Packer's Pretty Girl". Australian Financial Review. Retrieved 5 March 2024.
  15. ↑ "Noni B bags Rivers, Millers and Katies in Specialty buy". The West Australian. 14 May 2018. Retrieved 5 March 2024.
  16. ↑ Powell, Dominic (20 November 2019). "'Try before you buy': Noni B snaps up EziBuy for $1 to boost online sales". The Sydney Morning Herald. Retrieved 5 March 2024.
  17. ↑ "Mosaic Brands Limited (MOZ.AX) company profile & facts". Yahoo Finance. Retrieved 5 March 2024.
  18. ↑ Powell, Dominic (24 March 2020). "'Makes no sense': Major retailer slams government after shutting 1379 stores". The Sydney Morning Herald. Retrieved 5 March 2024.
  19. ↑ Le May, Rebecca (1 September 2021). "Retail giant behind Noni B, Katies, Rivers and Rockmans reveals 288 stores shuttered since pandemic start". News.com.au . Retrieved 6 March 2024.
  20. ↑ Simmons, David (6 September 2021). "Mosaic Brands to raise $32 million". Business News Australia. Retrieved 8 August 2024.
  21. ↑ Gorman, Alyx (27 May 2021). "Australian retailer Mosaic Brands fined $630,000 for misleading hand sanitiser claims". The Guardian. ISSN   0261-3077 . Retrieved 6 March 2024.
  22. ↑ Koehn, Emma (15 September 2022). "Katies, Rivers owner fined again over false product claims". The Sydney Morning Herald. Retrieved 6 March 2024.
  23. ↑ Blake, Dean (30 September 2021). "Mosaic Brands completes $11m EziBuy purchase to fuel online growth". Inside Retail Australia. Retrieved 5 March 2024.
  24. ↑ Turner-Cohen, Alex (3 April 2023). "Online shopping retailer goes into administration as sales down 51%". News.com.au. Retrieved 5 March 2024.
  25. ↑ "Founder laments Ezibuy downfall". New Zealand Herald . 22 July 2023. Retrieved 21 July 2023.
  26. ↑ "EziBuy tipped into liquidation by creditors". New Zealand Herald. 22 July 2023. Retrieved 5 March 2024.
  27. ↑ Taunton, Esther (20 July 2023). "Online retailer Ezibuy goes into liquidation owing more than $100m". Stuff . Retrieved 5 March 2024.
  28. ↑ Yun, Jessica (29 February 2024). "The Iconic's former CEO to lead budget brands Rivers, Katies, Noni B". The Sydney Morning Herald. Retrieved 5 March 2024.
  29. ↑ Yun, Jessica (3 March 2024). "Katies, Rivers, Noni B owner to defend 'flawed' ACCC lawsuit over failed deliveries". The Sydney Morning Herald. Retrieved 6 March 2024.
  30. ↑ Theocharous, Mikala (1 October 2024). "Mosaic axes five popular brands, closing 200 stores". www.9news.com.au. Retrieved 1 October 2024.
  31. 1 2 "Mosaic Brands unlikely to be missed in regional Australia, analyst says". ABC News (Australia). 2 November 2024.
  32. ↑ "Noni B, Rivers owner Mosaic Brands owes $250m with sale process under way". The Nightly. 25 November 2024. Retrieved 26 November 2024.
  33. ↑ "Clothing giant Mosaic Brands in voluntary administration, owing $250m". News.com.au. 25 November 2024. Retrieved 26 November 2024.
  34. ↑ "Australian fashion retail group's collapse leaves thousands of garment workers in Bangladesh in limbo". ABC News (Australia). 21 November 2024. Retrieved 26 November 2024.
  35. 1 2 "Mosaic Brands "likely" entered safe harbour in late 2022". Ragtrader. 6 October 2024. Retrieved 10 December 2024.
  36. ↑ "'Safe harbour' talk sends Mosaic Brands into rougher seas". Australian Financial Review. 7 August 2024. Retrieved 10 December 2024.
  37. ↑ "Mosaic Brands receivers close Katies chain, 480 jobs to go". Australian Financial Review . Retrieved 10 December 2024.
  38. 1 2 "Katies to be wound down and 80 Millers, Rivers and Noni B stores to close amid Mosaic Brands 'consolidation'". Seven News . Retrieved 10 December 2024.
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