ort-term cash flow issue or can’t get funding – this was a much deeper issue around the brand’s future direction and strategy,” the anonymous retail leader told Inside Retail. They identified three key areas affecting the business: a lack of brand differentiation, a large and expensive store network and an unfavourable reputation. Brand differentiation The retail leader said they had been watching Mosaic Group for years, waiting to see what would come of the brands that haven’t seemed to keep up with the pace and direction of the Australian retail industry. “I’ve been expecting this to happen for a number of years. I’m surprised that they never went into voluntary administration sooner,” they shared.  Our source added that the portfolio of brands, which previously included Rivers, Millers, Katies, Autograph, BeMe, Crossroads, Rockmans and W.Lane, “all look exactly the same, [there is] no real differentiation”. “Obviously, I put Rivers aside because there’s a bit of differentiation – but if you look at Noni B, Millers, Katie’s, etc, they’re kind of all the same. They don’t have any differentiation so to speak.” Financial pressure According to the retail leader, Mosaic Group’s expansion strategy in recent years was misdirected, prioritising the growth of the store network over its bottom line.  “They’re also aware of the fact that they were so heavily driven by sales, not by profit,” the retail leader stated. “They were driving a lot of new store openings over the years and ended up getting to a lot of stores.”  Mosaic Group had more than 700 stores nationwide and an additional 10 online stores making it difficult to restructure. “I looked at it many times and I could never work out how you could make it work… When I say ‘can’t make it work’, there’s way too many poor-performing stores,” the retail leader explained. “They kept pushing out their payments and then the suppliers wouldn’t deliver. They were always under the pump.” Reputational risk The collapse of Mosaic Group is not the first time the company has received negative publicity, which was another reason the retail leader we spoke to viewed it as an unfavourable acquisition. “If you look at the history over the last probably five years, the amount of times [Mosaic Group] got themselves into trouble in the media for a number of different reasons,” they elaborated. The biggest point the retail leader wanted to get across was that the demise of Mosaic Group is not a symptom of the challenging retail landscape currently, but a consequence of problematic business decisions. “The easiest thing when businesses get themselves into trouble is to blame the environment,” the retail leader concluded. “I want the banks who support retail, other ancillary services supporting retail, people who want to buy retail businesses to not get spooked by this – because this is not necessarily symptomatic of the industry.