Mosaic Brands, the retail group that owns fashion brands such as Millers, Noni B, Rivers, Katies, Rockmans and more, has delivered a disastrous FY20 loss along with news it plans to shut as many as 500 stores over the next two years.
The group owns 1332 Australian stores, employing 6800 people across the country.
Today they announced an underlying loss before EBITDA of $45.8 million for FY20. This is despite a pre-COVID forecast of EBITDA of $75 million for the year.
โTodayโs result does not reflect the consistent growth the Group has achieved over the past four years,โ Scott Evans, the Managing Director and CEO of Mosaic Brands said of the results.
Mr Evans noted a solid performance for the first third of the financial year, before business was โutterly derailed, first by the devastating bushfires which directly impacted 20 per cent of our store portfolio over the Christmas period, then by COVID-19 which saw us close all 1333 stores for nine-and-a-half weeks including the peak Mothersโ Day trading period”.
โThere is no roadmap to navigate these circumstances,” Mr Evans explained.
“But our operational priorities have been ensuring team and customer safety, reducing inventory and maintaining a strong cash position. This has allowed us to reshape Mosaic to take advantage of the fundamental changes happening in retail.
โThe retail rental market in Australia is not paused because of the pandemic โ it is fundamentally changed for the future,โ Mr Evans said.
โSome, though not all landlords, accept that reality, so while exact locations and numbers are to be determined, the Group anticipates potentially 300-500 store closures over the coming 12-24 months.
“Shuttered stores work for no one so we aim to minimise closures, but not on uncommercial terms.”
Richard Facioni, the Chairman of Mosaic Brands, said the decision to keep “hundreds of stores open longer in a key trading period would have been fiscally sound but completely against our commitment to putting our team and customers first,โ explaining how customers and team members were “in the most vulnerable segment that COVID-19 attacks”.
This announcement comes a week after Scentre Group, who own Westfield shopping centres, temporarily shut a number of stores owned by Mosaic in a rental dispute.
โThese actions are extremely disappointing given the current environment, and difficult to comprehend in the context of a relationship that spans close to 40 years,โ Mr Facioni said.