Mosaic Brands, the company behind Australian fashion brands including Rivers, Katies and Noni B, has entered voluntary administration, putting almost 3,000 jobs at risk.

The company, which operates more than 700 retail stores around the country, confirmed the decision in a statement to the Australian Securities Exchange (ASX) on Monday afternoon.

It comes after Mosaic announced it would shut down five of its brands in September: Rockmans, Autograph, Crossroads, W.Lane and BeMe.

At the time, Mosaic said the decision to reduce its brands was so it could “capitalise on and invest in” Millers, Noni B, Rivers and Katies as part of a broader operational restructure.

But on Monday, the company said voluntary administration was the “most appropriate way to restructure” after failing to secure the support of “a small number of parties” during discussions over “the past few weeks”.

“This process has involved discussions with a wide range of stakeholders, both locally and internationally, including Mosaic’s senior secured lender, suppliers, service providers, landlords and the ACCC,” the statement said.

“The Group’s leadership received the support of a significant majority of its commercial partners and was confident that the restructure would be in the best interests of all stakeholders.

“However, a small number of parties declined to support the restructuring proposal or negotiate a commercial outcome, and a commercially acceptable resolution could not be reached with the ACCC.”

The company said it would continue to trade despite being in administration, and would focus on “the key Christmas and holiday trading period”.

“The Board wishes to reiterate its belief to those who supported the restructure, to Mosaic’s customers and, most importantly, to Mosaic’s dedicated team across Australia, that the business has a long-term future,” it said.

Mosaic Brands has appointed FTI Consulting as administrators, while KPMG will oversee the company’s trading operations.

The company employs about 250 staff at its headquarters in Sydney and a further 2,500 people across its series of retail stores around the country.

‘A necessary process’

In a statement, Mosaic’s management said the administration was “a necessary process to reset” the business and ensure its ongoing success.

“Mosaic Brands continues to be an exciting opportunity to reshape a business with a clearly defined market proposition for its target customers, and employees, that we can be proud of,” CEO Erica Berchtold said.

“Our priority is to accelerate the rationalisation plans we have in place to focus on the core brands to service current and attract new customers across metropolitan and importantly regional Australia.”

David Hardy, a partner with KPMG’s Turnaround and Restructuring division, said the focus was on preserving the company’s brand portfolio.

“We will be seeking to stabilise the operations of Mosaic 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,” he said.

Mosaic Brands’s share price has been steadily declining since the beginning of January 2020, when it was trading at $2.30. By February this year, its shares had slid to 20 cents.

Prior to its suspension from trade on the ASX in August, its shares last traded at 3.6 cents — giving the company a total market capitalisation of $6.4 million.