Mosaic Brands CEO Scott Evans says same-store sales have rebounded since Easter. Louie Douvis

Further closings are expected, as 90% of the leases will expire within two years. The retailer said last August it could close between 300 and 500 stores over the next 12 to 24 months, unless owners agree to cut rents.

Store opening hours have also been reduced to align with customer buying behavior, further reducing labor costs.

Comparable store sales had jumped 57% since Easter – after falling 11% between July and May – with the relaxation of trade restrictions and the resurgence of customer confidence to shop.

Gross margins had also improved in recent months, after the retailer reduced inventory by 50 percent and sold more inventory at full price.

“After the most difficult 18 months imaginable, including the bushfires and the COVID-19 pandemic, we are confident that Mosaic Brands has done better and better with a very clear path to return to our annual track record of profitability and growth ”. said chief executive Scott Evans.

“We have reshaped our cost base, our inventory and remained focused on the margin rather than continuing to sell at all costs,” said Evans.

“We believe that as a national retailer that made these difficult changes early on, Mosaic Brands has never been in a better position to face the future.

The retailer has renewed a smaller-than-expected $ 25 million working capital facility with ANZ, which will be reduced to $ 15 million in January 2022. Mosaic will also receive an additional credit facility of $ 10 million if required from majority shareholder Alceon Group.

Last August, auditors for Mosaic, BDO, cast doubt on the company’s ability to continue operating, citing net current liabilities of $ 197 million.

The company has extended an option to buy the remaining 49% of online retailer EziBuy for $ 11 million from Alceon through September 2021. EziBuy is expected to earn around NZ $ 2.5 million in 2021 and $ 5 million NZ in 2022, before synergies, and will increase Mosaic’s online sales to more than $ 200 million, or about 30 percent of the group’s sales.

Wilsons analyst John Hynd said the earnings forecast, adjusted for EziBuy, was in line with market expectations and it looked like Mosaic wouldn’t have to raise capital to acquire the other half of EziBuy.

Mosaic has been particularly affected by the pandemic as its main customers are aged 50 and over. They are less likely to shop online and have had incomes hit by historically low interest rates.

Retailer lost $ 45.8 million in EBITDA in 2020 and collapsed to a net loss of $ 170.5 million after reducing goodwill and brand names by $ 113 million and having recorded provisions of $ 49 million for unpaid rents and obsolete inventory.



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