KPMG partner David Hardy said the focus would be to stabilise Mosaic’s operations and “to preserve the underlying value of the business while endeavouring to serve its customers, with support from its employees and suppliers to minimise business interruption”.

Loading

Mosaic Brands has cycled in and out of profitability in recent years. It was caught on the back foot during pandemic lockdowns and was forced to rapidly improve its e-commerce offering. Cash-flow has been constrained by lower spending by consumers affected by cost-of-living pressures.

Under Berchtold, who was appointed chief executive in April, Mosaic’s management was trying to turn the business around by slashing costs. It was negotiating reduced rents with landlords and, in some instances, had offered global suppliers one-third of what they were owed in a payment plan stretching over a two-year period.

Suppliers from Bangladesh, India and China were owed tens of millions by Mosaic. As a collective, they were divided over the extraordinary losses they had been asked to absorb by Mosaic management and also the payment plan negotiations.

Mosaic said in a statement it had received support from many of its commercial partners for its restructuring plan. But it had been unable to convince its senior secured lender, as well as some commercial parties, and resolve an outstanding dispute with the Australian Competition and Consumer Commission.

The ACCC had brought a lawsuit against Mosaic for allegedly failing to meet advertised delivery timeframes for several hundred thousand products that meant some customers paid for items that never arrived.

Shareholders in Mosaic include some of the nation’s wealthiest individuals, such as billionaire Spotlight owners Zac and Morry Fraid, whose investment vehicles own just under 20 per cent of the retailer. Other investors in Mosaic are Tony Berg, a former chief executive of Macquarie, and the Alceon group, co-founded by Trevor Loewensohn, a former investment banker, and former Babcock & Brown chief executive Phil Green.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.