It is expecting to report a deeper loss for the 2024 financial year in the range of between $15 million and $20 million, partially driven by disruptions from a botched technology migration project involving a new logistical supply chain platform.

This impacted Mother’s Day trading to a degree that was “greater than expected”, delaying the delivery of stock to stores in the lead-up to Mother’s Day. “This, combined with softness in consumer spending, severely impacted revenue and earnings in the fourth quarter,” Mosaic said in a statement from June 21.

Mosaic has close to 100 suppliers. A handful of them in Australia and China have complained about not being paid by the clothing group.

One of those suppliers was Faith Fashion, which went into liquidation in 2022. Darren Vardy, of Insolvency Options, which prepared the liquidator’s report, found that Mosaic owed Faith Fashion almost $197,000. In May 2022, he asked that the bill be paid but so far, it hasn’t.

Vardy’s report noted that Mosaic became Faith Fashion’s sole customer after 2019. Mosaic would place orders with Faith Fashion to have clothing manufactured in India, China and Bangladesh.

Vardy said after some investigation into Faith Fashion’s trading history with Mosaic, he found Mosaic had “continually failed to recognise all invoices outstanding”, “short-paid invoices without providing documentation in support of any deductions made”, “paid invoices outside the terms and conditions set out in the supply agreement”, “delayed the delivery of orders”, and cancelled orders where goods had already been manufactured, resulting in the inability of Faith Fashion or manufacturers being able to recoup their costs.

He also found that: “In or around July 2021 it was discovered that Mosaic had approached [Faith Fashion’s] suppliers directly to have goods manufactured. This has led to a significant decrease in the company’s revenue given that Mosaic was no longer purchasing products through the company. Creditors should note that the company and Mosaic entered into a confidentiality agreement which, inter alia, prohibits this conduct.”

Vardy was of the preliminary view that “Mosaic may have directly contributed” to Faith Fashion’s failure, and lawyers were engaged to consider action against Mosaic.

Another Australian supplier, On Trend Fashion Services, was owed a small sum by Mosaic when it went into liquidation in 2021. A liquidator’s report of that company, also done by Vardy, found Mosaic’s delay in payments and cancellation of orders to On Trend, partly caused by the pandemic, had contributed to its decline. On Trend and Mosaic had also come to a financial agreement after the former had failed to deliver certain products.

In China, a supplier, Jane Cheng, who is based in Ningbo, took to LinkedIn to make posts about late payment and having to delay the delivery of goods to Mosaic. She said this had caused her business hardship and that she had faced difficulty paying her workers.

Another Chinese supplier took to LinkedIn and claimed to be owed $1.26 million from two years ago by Mosaic. A supplier in Bangladesh was last week chasing $50,000 owed to it by Mosaic in correspondence seen by this masthead.

A Mosaic spokesperson said the company at times had disputes with suppliers. “We work with over 100 suppliers globally, many of who have been with us for over a decade, worked with us through the challenges of COVID, and continue to work with us.”

Mosaic is fighting a lawsuit brought by the consumer watchdog for allegedly failing to meet advertised delivery timeframes for several hundred thousand products, which saw some customers pay for items that never arrived.