Australian apparel group Mosaic Brands has issued a pause in trading today pending a further announcement.
The owner of Noni B, Rivers and Millers has not alluded to what the announcement could be about, but trading pauses are usually initiated ahead of news that could be deemed as significant.
In June this year, plus size retailer City Chic issued a trading halt days before announcing the sale of its US business, Avenue.
Today’s trading pause by Mosaic Brands comes a week after the company confirmed it will report a trading and statutory loss for FY24 amid operational issues.
As reported by Ragtrader last week, Mosaic anticipates a $5 million to $10 million loss in operating earnings before interest, tax, depreciation and amortisation and an operating profit loss (EBIT) in the range of $15 million to $20 million.
According to the company, the operational issues shared in its recent trading update continued to impact the group for the balance of FY24. This includes a logistical overhaul, where the business migrated to a fully integrated logistical supply chain and distribution system with a newly appointed global partner.
“The resulting working capital pressures caused by these operational issues, and their consequential impact on stock intake and trade, are being actively managed by Mosaic, working closely with the support of its major lenders,” Mosaic reported last week.
“While the FY2024 accounts continue to be finalised in advance of the full-year announcement later next month, the group confirms it will report a trading and statutory loss for FY2024.
“The group continues to anticipate a recovery in the first half of FY2025 as it works through and resolves the above issues.”
Alongside operating profit challenges, Mosaic’s net cash inflows were around $6.6 million in the latest quarter compared to approximately $19.8 million outflows in the previous quarter.
Mosaic noted that the seasonality of fashion purchasing in retail, typically the end of each of the March and September quarters, delivers net cash outflows and the December and June quarters deliver net cash inflows.
Mosaic Brands operates a network of circa 700 stores and a number of online digital department platforms.