Fashion retailer Mosaic Brands has revealed 288 stores have been forced to close since the start of the pandemic, only a day after the much-loved stationery brand kikki.K collapsed in Australia.
The company, which owns brands like Rivers, Katies and Noni B, has closed a staggering 165 stores since February this year alone.
‘The group continued to engage with landlords in reshaping our retail store rentals to the realities brought on by the pandemic,’ the document, lodged with the ASX, read.
Aussie fashion retailer Mosaic Brands, which owns stores such as Rivers, Katies (pictured) and Noni B, revealed in its annual report it had shut-down a staggering 165 stores since February
The retailer, which owns brands such as Rivers, Katies and Noni B (pictured), has been forced shut-down a staggering 165 stores since February this year
‘Accordingly, the group closed 242 shops throughout the period (the 2020-21 financial year) where economical rentals could not be achieved.’
A market update revealed the number of store closures had jumped significantly from 123 in February to 212 just three months later in May.
The report blamed the mass shut-down on stubborn landlords who had ‘pre-pandemic expectations’ and refused to lower the rent.
Chairman Richard Facioni revealed the gloomy update during the company’s latest corporate presentation and attempted to put a positive spin on the closures.
Mr Facioni defended the move and said the company had acted ‘quickly and defensively’ while under pressure from the Covid-19 pandemic.
He said Mosaic Brands was leading the way ‘in publicly addressing uncommercial and inflexible lease arrangements that the pandemic served to highlight’.
Mosaic Brands annual report blamed the mass shut-down on stubborn landlords who had ‘pre-pandemic expectations’ and refused to lower the rent (pictured, a Rivers store in Melbourne)
While all retailers have felt the brunt of the pandemic, those with a younger and tech-savvy demographic saw their online sales increase (pictured, Inner West resident on Wednesday)
The chairman said a series of hard decisions had been made to steer the company in the right direction including lifting margins, reducing stock and preserving cash.
Mr Facioni added his company was one of the hardest-hit by Covid-19 and had suffered in the retail bloodbath that followed due to its older customer base.
The closure of the stores appears to have lightened the load on the retailer with directors reporting a rapidly growing digital business and surge in online sales.
The company has made an impressive return to pre-pandemic levels with its full-year results displaying a doubling in net profit to $2.78million.
However shares in Mosaic Brands have taken a hit, down from its 12-month closing peak of $1.15 to 45cents.
The business took a similar hit during last year’s lengthy lockdown announcing they would close up to 500 stores after being ‘utterly derailed’ by the pandemic.
Mosaic Brands took a similar hit during last year’s lengthy lockdown announcing they would close up to 500 stores after being ‘utterly derailed’ by the pandemic (pictured, a Katies store)
In a grim prediction of the future, chief executive Scott Evans said at the time he expected the closure of 500 stores.
He said the company had reported a statutory loss before tax of $212.1 million, a 1,900 per cent decline on the prior year’s profit of $11 million.
While all retailers have felt the brunt of the pandemic, those with a younger and tech-savvy demographic saw their online sales increase.
The company – which also oversees retailers Crossroads, Autograph, Rivers, Millers and W.Lane – is still operating 1091 stores across Australia.
The widespread closures come just one day after much-loved stationery brand kikki.K announced its collapse in Australia.
Kristina Karlsson and Paul Lacy, the founders of the cult brand were forced to break the news to staff in a statement released this week.
The news of the shut-down came only 17 months after the Swedish-inspired brand went into voluntary administration after owing $20million to its creditors.
The founders have blamed the most recent collapse on tough restrictions that forced the closure of at least 18 stores, the AFR reported.
Kikki.K have also been forced to sack a large portion of its 300 employees who work in Victoria, New South Wales and the ACT.
The news came only 17 months after the Swedish-inspired brand (pictured) went into voluntary administration after owing $20million to its creditors
Kristina Karlsson (pictured) and Paul Lacy, the founders of kikki.K were forced to break the news to staff in a statement released this week
The brand relies heavily on in-store sales in franchises in Australia and New Zealand, with online purchases proving not enough to keep the company afloat.
After collapsing for the first time 17 months ago, the business was sold to lifestyle brand Erin Condren Designs in June, who took over the reins in August.
The company – which was founded in 2001 – owed $20million to creditors and was subsequently placed into administration under Cor Cordis, following a ‘perfect storm’ of conditions that led to the shutdown.
As the never-ending cycle of lockdowns continues to cripple Australian businesses, Erin Condren decided it was too risky to continue funding the brand.
Before the recent collapse, Ms Karlsson’s company had 102 global stores with its stationery stocked in an additional 250 and sold online to 147 countries.