Mosaic Brands, owner of budget clothing brands including Noni B, Millers, Katies and Rivers, has gone into administration and brought in the receivers after failing to secure support for a restructure from several investors and a resolution with the ACCC on alleged breaches of Australian Consumer Law.

Vaughaun Strawbridge, Kathryn Evans, Kate Warwick, and David McGrath have been appointed joint and several administrators of the ASX-listed group. In addition, Mosaic's senior secured lender has appointed KPMG's David Hardy, Gayle Dickerson, Ryan Eagle, and Amanda Coneyworth as Receivers and Managers to work alongside the Administrators throughout the restructuring process.

News of administrators being appointed comes a month after the company said it would not be able to lodge its already delayed FY24 financial results. Having first announced it would not be filing its FY24 annual results within the specific timeframe, Mosaic Brands began informally restructuring its operations.

Among the sweeping changes are plans to exit five brands - Rockmans, Autograph, Crossroads, W.Lane and BeMe brands, including all stores and websites. These five brands had become margin and non-core and exit would enable the group to focus on five core growth brands, Mosaic CEO Erica Berchtold told investors last month: Millers, Noni B, Rivers, Katies and a standalone online Mosaic marketplace.

Initiatives also included rationalising the Group’s Brand and store portfolio and focusing on key growth brands, reducing costs and improving Mosaic’s working capital position. But clearly internal conversations have broken down. Bringing in voluntary administration is the latest outcome from these efforts.

"Over the past few weeks, Mosaic’s Board and executive team have progressed plans to restructure, realign and simplify Mosaic’s operations, as previously announced to the market. .. This process has involved discussions with a wide range of stakeholders, both locally and internationally, including Mosaic’s senior secured lender, suppliers, service providers, landlords and the ACCC. The Group’s leadership received the support of a significant majority of its commercial partners and was confident that the restructure would be in the best interests of all stakeholders, resulting in a more focused and financially stronger retailer, with the expectation that its securities would resume trading on the ASX," the statement read.

"However, a small number of parties declined to support the restructuring proposal or negotiate a commercial outcome."

Mosaic has also been also unable to come a commercially acceptable resolution with the ACCC. The ACCC has issued proceedings in the Federal Court, alleging the Group breached Australian Consumer Law relating to late or non-delivery of goods during and immediately after the Covid-19 pandemic.

Despite these challenges, the Group said it will continue to trade, with management intending to progress its brand rationalisation and wider restructuring plan, and to focus on the key Christmas and holiday trading period.

"The Board wishes to reiterate its belief to those who supported the restructure, to Mosaic’s customers and, most importantly, to Mosaic’s dedicated team across Australia, that the business has a long-term future," the company stated.

The second half of the year had proven challenging for Mosaic and the discretionary consumer sector, with the company stating it had been adversely affected by disruptions during its transition to a fully integrated logistical supply chain and distribution system with a new global partner. These disruptions were more significant than anticipated, causing delays in inventory delivery and severely impacting revenue and earnings in the fourth quarter.

- with additional reporting by Nadia Cameron