August 25, 2020
Mosaic Brands Pty Ltd – the company behind a string of well-known clothing stores – has announced it will be closing between 300 and 500 shops during the next two years.
Mosaic’s fashion stores include Millers, Rockmans, Noni B, Rivers, Katies, Crossroads and Beme.
It has a network of 1333 stores across Australia – including several located in Kingaroy Shoppingworld – and a total of about 6000 employees.
In a statement to the ASX on Tuesday, the Mosaic Board said the “store reduction program” was dependent on final lease negotiations and the exact locations of closures was yet to be decided.
The company announced an underlying loss of $45.8 million for the year to June 28.
The statement said it had been “materially impacted” by the bushfires and COVID-19 pandemic.
“The first third of the financial year saw the business perform solidly,” CEO Scott Evans said.
However, forecasts of a $75 million profit for the financial year were then “utterly 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 9½ weeks, including during the peak Mother’s Day trading period,” Mr Evans said.
The ASX statement said Mosaic had been progressively reducing its exposure to long leases. This meant 41 per cent of current leases will expire before December this year, and about 87 per cent within the next two years.
“The retail rental market in Australia is not paused because of the pandemic, it is fundamentally changed for the future,” Mr Evans said.
“Some, 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 grounds.”
Mosaic also reported a strong growth in online sales, including 40 per cent growth in July.