Some of Australia’s best-known fashion brands are disappearing from shopping centres as retail conglomerate Mosaic Brands teeters on the brink with high debts and unpaid suppliers.

Dozens of Rockmans, Autograph, Crossroads, W.Lane and BeMe stores will be closed under a rationalisation plan unveiled by Mosaic on Tuesday in which the brands will be retired completely.

Mosaic hopes the move will free up resources to strengthen its wider business, which includes hundreds of Noni B, Rivers and Katies stores that are struggling for relevance with consumers.

The move comes after weeks of speculation about the company’s future as its shares remain suspended and several suppliers in Bangladesh petition Australian diplomats over unpaid bills.

Why Mosaic is struggling

Sharp declines in sales as consumers have pulled back discretionary spending over the past year have helped push the business into trouble, but wider retail trends have also played a role.

University of Sydney retail expert Lisa Asher said Mosaic is falling prey to an apparel market that is being “redefined” by fast fashion players, including global giants H&M, Uniqlo and Zara.

Those chains have opened hundreds of stores across Australia over the past decade, aggressively marketing cheap fast fashion to Mosaic’s traditional middle market customers.

Elsewhere, online retailers like Amazon and more recently Temu have also expanded, making it more difficult for Mosaic’s e-commerce businesses to grow, particularly pure play brand EziBuy.

“We have moved from retailers having two collections per year to suit each summer/winter season … to more frequent drops of new merchandise every two weeks,” Asher tells TND.

Mosaic was hit hard by the Covid-19 pandemic and has struggled to find its footing since, with landlord disputes over unpaid rents and more recently supply chain issues that crippled its key Mother’s Day sales earlier this year.

Net cash inflows plunged from $19.8 million over the first three months of 2024 to just $6.6 million over the June quarter, leading Mosaic to predict a statutory loss for the financial year.

But its final audited accounts have been delayed for more than a month due to “events after the reporting period, which will impact the disclosures”.

Nevertheless, Mosaic chief executive Erica Berchtold said the divestment of “non-core” brands would help put the company in a better position by simplifying it and focusing financial resources.

Berchtold said the group would rationalise its brand portfolio as part of driving simplification across the business and focusing resources.

“Each of those core brands will have a clearly differentiated market proposition, target customer, price point and product range,” she said.

Wider implications

Mosaic’s struggles foreshadow wider ramifications for the retail sector, particularly because its many brands have long been fixtures of Australia’s shopping centres in urban and rural areas.

Asher explained that the company has adopted a “follower” strategy in recent years, drastically upscaling the number of products it sells, particularly online, in a bid to keep up with competitors.

Corporate accounts show Mosaic expanded its stock units more than 10-fold since Covid-19, with growth of 825 per cent in the 12 months to December 2021 and another 229 per cent in the following year.

The other plank of its restructuring plan has been to open bigger stores that can accommodate more stock and deliver more of a destination-style experience to shoppers, particularly for Rivers.

Asher said the environmental costs of trying to compete with fast fashion giants with a similar strategy is substantial, with products becoming less durable – intended to last weeks, not years.

It’s a trend also taking place in New Zealand, where local retail chains are struggling to compete with low-cost, high-volume models, including Australian-owned discount department store Kmart.