Mosaic Brands, which owns clothing brands such as Rivers, Katies, Millers, Rockmans and Noni B, plans to shut up to 500 stores across Australia after being “utterly derailed” by the devastating bushfires earlier this year and the ongoing coronavirus crisis.
The fashion retailer made the announcement to shareholders on Tuesday while delivering its full-year results which ended June 28, reporting a staggering $45.8 million loss.
Mosaic Brands’ Managing Director and CEO Scott Evans said the decision came down to the devasting bushfires followed by the coronavirus pandemic which saw stores shut for almost 10 weeks.
“That forecast was 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 9.5 weeks including the peak Mother’s Day trading period,” he said in a statement.
Evans went on to say that Mosaic Brands are now planning to close potentially 300 to 500 stores over the coming 12 to 24 months.
“The retail rental market in Australia is not paused because of the pandemic — it is fundamentally changed for the future,” he 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 terms.”
Meanwhile, it comes after 129 of the group’s stores in Westfield Shopping Centres across the country were forced to shut last week over a rent dispute with the landlord Scentre Group.
And the shock announcement comes after mega-retailer Target announced as many as 167 could soon disappear from the Australian high street following an announcement by Wesfarmers earlier this year.
Of the 284 stores currently operating, 75 have been earmarked for closure, including between 10 and 25 large Target stores and 52 smaller Target Country stores, while as many as 92 could potentially be converted into popular Kmart stores.
“For some time now, the retail sector has seen significant structural change and disruption, and we expect this trend to continue. With the exception of Target, Wesfarmers’ retail businesses are well-positioned to respond to the changes in consumer behaviour and competition associated with this disruption,” Wesfarmers Managing Director Rob Scott said at the time.
“The actions announced reflect our continued focus on investing in Kmart, a business with a compelling customer offer and strong competitive advantages, while also improving the viability of Target by addressing some of its structural challenges by simplifying the business model.”