Australian fashion retailer Mosaic Brands will close 160 retail stores nationwide by mid-January, resulting in job losses for nearly 500 employees. The closures include all 80 Katies stores and additional outlets from brands such as Millers, Rivers, and Noni B, marking a significant shake-up for the iconic fashion group.
The announcement follows the company’s voluntary administration in October, triggered by mounting debts totaling $249 million owed to 171 creditors and an undisclosed amount to 300 employees.
Legacy Brands Under Strain
Mosaic Brands, known for its affordable women’s fashion targeting older demographics, owns a portfolio of labels including Rockmans, Autograph, Crossroads, W Lane, and BeMe. Last month, the company shuttered stores from these brands, reflecting its ongoing financial struggles.
Katies, a flagship brand established in 1954, earned its place in Australian retail history as a go-to destination for cost-effective workwear. Despite its legacy, Katies and other Mosaic-owned stores struggled to compete in an increasingly online-driven market, compounded by the rise of fast-fashion competitors like Shein and Temu.
Store Closures After Performance Review
Receivers from KPMG conducted a performance review across Mosaic’s store network, identifying loss-making outlets as unsustainable.
“The receivers and managers of the Mosaic Brands Group have made the difficult decision to commence a store consolidation program, impacting approximately 160 stores across the group’s portfolio,” a spokesperson for the receivers said.
They emphasized that the decision to close stores was not taken lightly and extended their gratitude to employees for their dedication throughout the receivership process.
Financial Challenges and Employee Impact
The closures will affect about 480 employees, who will be notified in the coming weeks. Many workers are now facing uncertainty about their futures, with some expressing concerns about financial stability during the post-holiday period.
Mosaic Brands’ financial woes extend beyond domestic operations. The company reportedly owes over $30 million to 23 Bangladeshi garment factories, raising questions about its broader supply chain commitments.
Struggles in a Competitive Market
Industry experts attribute Mosaic Brands’ downfall to a combination of factors, including its slow adoption of e-commerce and the COVID-19 pandemic’s impact on brick-and-mortar retail.
Dr. Carol Tan, an RMIT fashion industry expert, explained, “Mosaic’s reliance on physical stores and its overlapping brand strategies cannibalized its market. The company was already experiencing declining foot traffic pre-pandemic, and the shift to online shopping left them behind.”
Additionally, the company faced rising rental costs for its large retail footprint, further straining its finances.
Consumer Sentiment and the Future
The closure of Katies has resonated with long-time customers, many of whom took to social media to share nostalgic memories of the brand’s quality and affordability in its heyday. However, recent criticisms highlight a perceived decline in the quality of products and failure to evolve with changing consumer preferences.
Despite the store closures, Mosaic Brands will continue trading through the Christmas season, aiming to stabilize its remaining operations. The receivers stated that the closures would not interfere with the ongoing voluntary administration process.
A Broader Retail Trend
The challenges faced by Mosaic Brands are not unique in the Australian retail landscape. The rise of online-only retailers and fast-fashion giants has disrupted traditional players, leaving many legacy brands struggling to maintain relevance.
The closures of Katies and other stores represent not only the end of an era for one of Australia’s iconic fashion retailers but also a cautionary tale for other brands navigating the rapidly changing retail environment.
For the nearly 500 employees losing their jobs, the immediate focus will be on transitioning to new opportunities in an already challenging economic climate. Meanwhile, Mosaic Brands’ remaining assets and operations will undergo further restructuring as it seeks a path to recovery.