The parent company of iconic Australian brands, Millers, Katies and Rivers, Mosaic Brands, is set to close up to 500 stores, after posting a $46 million loss for the financial year.
The company cited bushfires and nearly 10 weeks of forced store closures due to the coronavirus pandemic as reasons for the losses, and revealed it would not pay a first half dividend to shareholders.
The store closures are set to take place within the next 12 to 24 months.
“Today’s result does not reflect the consistent growth the Group has achieved over the past four years, nor does it reflect our circa 6,000 strong team’s hard work and commitment during FY20,” Mosaic Brand’s managing director and chief executive, Scott Evans, said.
“The 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 1,333 stores for 9.5 weeks including the peak Mothers’ Day trading period.
“There is no roadmap to navigate these circumstances, but our operational priorities have been ensuring team and customer safety, reducing inventory and maintaining a strong cash position.”
The company said nearly 90 per cent of its current leases were set to expire over the next two years, which meant store closures could happen quickly.
“The retail rental market in Australia is not paused because of the pandemic – it is fundamentally changed for the future,” Evans 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.”
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