‘Derailed’ fashion chain to close 500 stores
One of the nation's largest retailers plans to close hundreds of its clothing stores following a devastating financial loss driven by the COVID-19 pandemic.
Mosaic Brands - which owns a suite of popular fashion stores including Rivers, Millers, Katies, Noni B and Crossroads - reported a staggering $45.8m annual loss on Tuesday.
That dismal result came down to the double whammy of the devastating bushfires followed by the coronavirus pandemic which shut down stores for almost 10 weeks.
Mosaic Brands' CEO Scott Evans said the group had been progressively reducing its long lease terms over the past three years, with about 41 per cent of current leases either on hold or due to expire by December.
He said about 87 per cent of its 1333 stores were due to expire over the next two years.
"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."
Mr Evans said the company was on target for a $75m profit before tax at the start of the year before bushfires and the pandemic decimated forecasts.
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 1113 stores for nine-and-a-half weeks including the peak Mother's Day trading period," he said.