Insolvencies across Australia have surged by 62.6 per cent in October 2024 compared to the same month last year, with the recent collapse of Mosaic Brands in that mix.
This is according to new data released by the Australian Securities and Investments Commission (ASIC).
All insolvency appointments - whether first-time, subsequent or transitional - hit a total of 1,870 in October, well above 1,150 recorded in the same month last year.
It is also 9.3 per cent above the prior month of September, which was at 1,711.
First time appointments are also up, hitting 1,362 in October 2024, 50 per cent more than the same time last year.
The retail industry comes fourth in terms of total insolvency appointments. In the financial year to November 24, 2024 (FY25), retail insolvencies are at 472. This is above 365 recorded in the financial year-to November 24, 2023 (FY24), and 260 in 2022 (FY23).
Construction leads the way, with a total of 1,994 insolvencies recorded in the financial year to November 24, 2024 (FY25), followed by accommodation and food services (1,450) and ‘other services’ (859). Other services include personal services like hairdressers, repair and maintenance, funeral services and the like.
In October, there were 82 retail companies that entered external administration for the first time, in provisional terms. Twenty of these were court liquidated, and 28 were creditor’s voluntary liquidations. Meanwhile, 18 were voluntary administrations (like Mosaic Brands), and 12 were restructuring appointments.
The 82 first-time external administration appointments in retail in October is nine more than what was recorded in the same time last year.
The latest peak comes as prominent apparel business Mosaic Brands fell into voluntary administration in late October this year, owing around $250 million in liabilities. The latest update from KPMG - the receivers and managers of Mosaic while under VA - confirmed that Katies will be wound down, including the closure of 80 stores, with another 80 stores across Noni B, Millers and Rivers.
Approximately 480 store employees will be impacted by the planned closures, KPMG added.
FTI Consulting, the appointed administrators of Mosaic Brands, is undertaking a sale process of the Mosaic Brands company, with KPMG confirming that the store closures won't impact the sale process for Mosaic Brands.
“Following submissions of non-binding indicative offers in late November, short-listed parties have been undertaking due diligence on the group,” KPMG reported.
“Due to the ongoing due diligence and discussions with interested parties, FTI Consulting have advised parties that the deadline for binding offers has been extended until end of December 2024.”