Major n fashion retailer Mosaic Brands has entered voluntary administration, putting thousands of jobs at risk.
The ASX-listed retailer, which holds iconic brands such as Katies, Millers, Noni B, Rivers and Autograph, announced its move into administration on Monday afternoon.
The company is ‘s largest women’s fashion retailer group and had employed more than 4000 staff in more than 700 stores around the country.
‘Following recent attempts by the company to informally restructure its operations, the Board of Mosaic has determined that voluntary administration is now the most appropriate way to restructure the group,’ the company said.
The company has appointed Vaughan Strawbridge, Kathryn Evans, Kate Warwick and David McGrath from FTI Consulting as administrators.
Mosaic’s senior secured lender has appointed KMPG as receivers and managers to work alongside the administrators in the restructure process.
The administration process means control of Mosaic will shift to FTI Consulting, who will assess the company’s accounts and determine whether it can be restructured to continue trading or whether it is in the best interest of creditors and employees to enter liquidation.
The announcement comes just weeks after Mosaic announced it would be closing five of its major retail franchise chains.
Rockmans, Autograph, Crossroads, W.Lane and BeMe brands – including their stores and websites – will be shut down, Mosaic CEO Erica Berchtold confirmed in October.
Ms Berchtold said the shuttered brands had ‘become marginal and non-core’ and closing them would allow the company to focus on its remaining five.
At that time, the group stated it was focused on the brands Millers, Noni B, Rivers, and Katies. However, the future of these brands is now uncertain.
Professor Gary Mortimer, Queensland University of Technology Business School retail expert, said Mosaic Brands made the mistake of ‘essentially creating multiple brands to market to the exact same audience – middle aged, middle class woman’.
‘If you walk into a shopping centre, you will find at least two, if not three, of those brands all competing for the same customer and that just duplicates and triplicates the cost of doing business,’ he told News Corp.
Professor Mortimer likened the overlap to what Kmart and Target – both owned locally by Wesfarmers – were doing, often competing against themselves.
Mosaic currently has a total of around 763 stores across and New Zealand but has been trying to focus more on big-box Rivers megastores in regional as part of its ‘BIG strategy’.
Noni B’s founder Alan Kindl, who founded the store in Newcastle in 1977 with his wife Betty, died in August, aged 86.