Mosaic Brands, a major Australian clothing retailer, has entered voluntary administration, with debts totaling almost $250 million. The company, which operates brands such as Noni B and Millers, was placed into administration on October 28. A report from the appointed administrators reveals a significant number of creditors, including over 300 employees and 23 Bangladeshi garment factories.
KPMG has been appointed as the company’s receivers and managers, and is now working to sell the business. The company’s financial struggles are highlighted by the unpaid debts to suppliers, particularly the 23 Bangladeshi garment factories, which are collectively owed more than $30 million. Workers at these factories, who earn only a few hundred dollars a month, have expressed concern about their ability to support their families.
Before entering administration, Mosaic Brands had announced the closure of several of its labels, including Autograph, BeMe, Crossroads, Rockmans, and W.Lane. These closures were intended to allow for more investment in other brands like Katies, Millers, Noni B, and Rivers. Despite these efforts, Mosaic’s attempt at restructuring proved unsuccessful, with the company officially stating that voluntary administration was the most viable option.
In a statement to the ASX, Mosaic confirmed that a majority of its secured lenders, suppliers, and landlords supported the restructure, but a few creditors, including the Australian Competition and Consumer Commission (ACCC), rejected the proposal. As a result, the company was unable to reach a resolution with the ACCC, which ultimately led to the move into administration.
Mosaic will continue trading while focusing on its holiday period sales and developing a broader restructure plan. The company has assured stakeholders, including its employees and customers, that it remains committed to a long-term future.
The collapse has raised concerns within the global garment industry. The Bangladesh Garment Manufacturers and Exporters Association criticized Mosaic for setting a poor precedent, stating that the company’s failure to pay its debts could harm workers and suppliers. Oxfam Australia also weighed in, highlighting the plight of the low-paid workers in Bangladesh. According to Oxfam’s Sarah Rogan, the collapse has left workers without payment for goods already produced, effectively forcing them to work for free.
As Mosaic navigates its restructuring process, KPMG has identified over 12 potential buyers for the business. Administrators are optimistic that some employees can be redeployed and that worker entitlements will be met. However, the final outcome remains uncertain as the company continues its efforts to resolve its financial crisis.
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