Australian company Mosaic Brands has confirmed the closure of 250 stores nationwide, with much-loved brands including Katies, Millers and Noni B potentially set to be impacted.
Chairman Richard Facioni reportedly delivered the news at the annual meeting, according to the Australian Financial Review, telling shareholders that bricks and mortar stores will always be part of the company, despite having already closed more than 70 sites this year.
Rockmans and Crossroads stores were the most heavily impacted when Mosaic Brands closed 73 stores across Australia in the first quarter of 2020, but now another 250 stores are slated to shut up shop for good due to a decline in foot traffic.
“The online shift is permanent, which has implications for the physical retail footprint and unrealistic rent expectations from landlords,” Facioni said, reports the AFR. “Stores are and will always remain a central part of Mosaic Brands and serving our customers. But not at the cost of unrealistic rents, nor landlord expectations that pre-date the internet.
“In August we informed the market that up to 500 of our 1300 plus store portfolio nationally could be closed if realistic rental agreements were not struck.”
Today’s announcement comes after the company first announced plans to shut up to 500 stores across Australia back in June, after being “utterly derailed” by the devastating bushfires earlier this year and the ongoing coronavirus crisis. The fashion retailer made the announcement while delivering its full-year results to June 28, reporting a staggering $45.8 million loss.
Mosaic Brands CEO Scott Evans said the decision came down to the devastating 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.”