Mosaic Brands announced that EziBuy is in voluntary administration yesterday. Photo / NZ Herald
Mosaic Brands announced that EziBuy is in voluntary administration yesterday. Photo / NZ Herald
No one is more saddened by the downfall of EziBuy than co-founder Peter Gillespie who, with his brother Gerald, built the business into a powerhouse online retailer before selling it in 2012.
“It’s very disappointing,” Peter Gillespie said after learning the company had been put into administration by its Australianowners.
ASX-listed Mosaic Brands notified investors yesterday, saying EziBuy had suffered a 51 per cent decline in sales from June to December last year.
“The board determined that it was in the group’s best interests as a whole that the EziBuy business be restructured,” the company said.
Mosaic spokesman Chris Fogarty said recent discounting at New Zealand stores was unrelated to the company’s administration. Last week, the company’s Sylvia Park store was clearing out stock with all items at $30.
Fogarty said EziBuy was not performing as well as Mosaic’s other brands since the pandemic and the voluntary administration meant the company could “reorganise the business”.
“Parties that want to buy or come on board will be able to do so,” Fogarty said.
The administrators will likely propose a deed of company arrangement, known as a Doca, on how to move forward with trading. Creditors then get the opportunity to vote on how the business will proceed.
EziBuy’s business model was based on direct-to-consumer mail-order apparel.
The Gillespie brothers founded the company in 1978. Originally based in Palmerston North, EziBuy grew into one of Australasia’s biggest multichannel retailers.
In 2012 they sold the business to Australian private equity firm Catalyst, which later sold it to supermarket giant Woolworths for $350m.
Peter Gillespie said yesterday he was comfortable with the decision back then to sell the business. Asked if he would have run the business differently since then, he said: “I’m sure we would have.”
EziBuy is online only in Australia but has a handful of stores around New Zealand.
One customer was notified by text that the retailer’s Albany store is closing down.
One EziBuy customer received a text about the Albany store's closing down sale.
Mosaic owns clothing brands Rockmans, Noni B, Katies, Crossroads, W Lane and Autograph.
Formerly named Noni B, the retail group bought a majority stake in EziBuy in 2019, completing the buyout in 2021.
First Retail’s Chris Wilkinson said the Gillespies’ model helped build the brand’s reputation around the country, especially in provincial areas with reduced access to stores.
“It was one of NZ’s most successful mail-order businesses,” he said.
Chris Wilkinson, managing director of First Retail Group. Photo / Mark Mitchell
Wilkinson added the cost of living crisis is likely to have affected the business.
“Apparel is one of the hardest hit areas of discretionary spending,” Wilkinson said. “Apparel is sliding as consumers change in spending,” he said,
Wilkinson said the expansion of fast fashion and other low-cost brands in provincial areas in Australia and New Zealand would have affected EziBuy’s popularity.
“EziBuy did well from knowing their market. They had a strong depth of connection with their customers,” Wilkinson said.
In recent times however it failed to keep up with consumer expectations.
Wilkinson said fashion retail “is about evolving and continuing to change” and that EziBuy has “lost its direction”.
He said that as e-commerce continues to grow, more players are keeping up with a new customer base.
“People don’t get it anymore,” Wilkinson said of EziBuy.
“It’s about appealing to people who are spending money, which is usually younger people,” Wilkinson said.
“EziBuy is in an uncomfortable position in recent years. They’re struggling to remain relevant,” he said.
He said the clothing retailer was at its height in the 1990s and early 2000s, joining large players at malls like Capital Gateway in Wellington and Auckland’s Westfield in Manukau City.
Wilkinson said the retailer’s NZ stores could be used in a number of ways.
“They may be able to redeploy stores here for stock, or they can have other Mosaic brands in those stores. It depends on Mosaic’s appetite for physical retail,” Wilkinson said.
Mosaic Brands results posted in February showed the group’s revenue was up 7 per cent for the half-year ended January 1, 2023, at A$318.3 million compared with the half-year ended December 26, 2021.
The group’s profit before tax was A$10.6m, down 51 per cent on the previous period while the total comprehensive income for the half year took a 86 per cent hit coming in at A$2.04m.
Mosaic’s total expenses excluding finance costs increased 19 per cent, with occupancy expenses jumping to A$27.1m from A$4.1m in the previous period.
