Australian fashion business Mosaic Brands has reported a challenging second-half amid softened consumer spending alongside a group-wide overhaul of its logistical operations.
Mosaic Brands manages nine retail businesses, including Rivers, Noni B and Millers.
According to the group, it’s second half of trading has been more challenging for the business and across the discretionary consumer sector more broadly.
It added that Mosaic was negatively impacted during the half by disruptions as it migrated to a fully integrated logistical supply chain and distribution system with a newly appointed global partner.
This follows a first half operating profit result of $13.1 million.
“The implementation disruptions experienced by Mosaic were greater than anticipated, delaying the delivery of inventory leading into the key Mother’s Day trading period,” the group reported.
“This, combined with softness in consumer spending, severely impacted revenue and earnings in the fourth quarter.”
Mosaic Brands now expects the full year result for FY24 to be a marginal loss at the operating earnings before interest, tax, depreciation and amortisation level.
Despite the “disappointing” result in the second half of FY24, the group expects a recovery in the first half of FY25.
“The issues experienced moving to the new logistics model have now been largely resolved and inventory is normalising across the group, with comparable sales improving throughout June.”
The first half of FY25 is also expected to benefit from a 20 per cent increase in inventory intake at a 10 per cent lower cost price when compared with the first half of FY24, the group reported, alongside material annual cost savings associated with the new logistics partnership.
“Mosaic continues to closely manage its working capital position during this period and is continuing to progress the terms of a refinancing or extension of its outstanding convertible notes.”
The group will post its full year FY24 audited financial results in August.