on chains, including Noni B, Millers, Rivers and Katies, which collapsed at the end of last year and is now in liquidation. However, Mosaic is far from the only corporate casualty in this story. SurfStitch, Ginger & Smart, EziBuy and Pumpkin Patch were all purchased by Alceon, and, except EziBuy, later managed by Alquemie, and they have all been quietly closed or sold over the past two years. As public scrutiny of the demise of these businesses intensifies, Inside Retail has reviewed years of reporting and regulatory documents to reveal the common threads that tie many of them together.  What has emerged is a picture of opportunistic retail acquisitions by a small group of private-equity investors with a commitment to a cost-out growth strategy centred on shared services. While this approach was well-received at the time, it ultimately failed to deliver many of the promised turnarounds. The rise of Alceon and the making of a retail empire It all started in 2014 with Alceon Group’s acquisition of a 76 per cent stake in the publicly listed Noni B Group for A$16.4 million. Led by Richard Facioni, Alceon’s executive director at the time, it marked the private-equity firm’s first retail investment. Under Alceon’s ownership, Noni B expanded rapidly, acquiring Pretty Girl Fashion Group for an estimated A$75 million in 2016, which brought Rockmans, BeMe, Table Eight and W.Lane into its portfolio. Later, it picked up Specialty Fashion Group, including Autograph, Crossroads, Katies, Millers and Rivers, for A$31 million in 2018. At the time, Noni B’s CEO Scott Evans acknowledged that the company was acquiring under-performing businesses.  “However,” he said, “we believe our disciplined approach to cost of doing business, combined with our customer focus, will ensure a successful turnaround.” Over the next four years, various leaders at Alceon and Alquemie would propose the same formula to acquire and reinvigorate several other struggling retailers.  Following the same private-equity playbook  Between 2016 and 2018, Alceon acquired the discount variety retailer Cheap-as-Chips, the online retailer EziBuy, which it bought from Woolworths A$10 million, and the online retailer SurfStitch, which was absorbed into EziBuy through a deed of company arrangement.  The intention was for SurfStitch and EziBuy to tap into economies of scale as a combined group, but a year later, in 2019, Noni B ended up buying EziBuy to leverage its digital expertise across its brands.  By July 2018, Alceon’s retail investments were generating about A$1.5 billion in sales from more than 1400 stores, according to an article published in the Australian Financial Review, and its leadership was quickly gaining a profile as retail turnaround experts.  “We can look at a business and say we can immediately give you an uplift in sales by accessing our customer base and taking costs out through shared services,” Facioni told the Australian Financial Review. “All of a sudden, it looks quite different in our hands than it does in the vendor’s hands – we are seeing those sorts of opportunities at the moment.”  Firm in their beliefs, the acquisition of under-performing businesses continued.  In October 2018, Alceon bought the assets of children’s clothing retailer Pumpkin Patch from Catch Group for an undisclosed amount, followed by premium womenswear brand Ginger & Smart for A$1.1 million in June 2019.  The plan was to plug Ginger & Smart into Alceon’s online “infrastructure” through EziBuy and SurfStitch. A similar relaunch plan was devised for Pumpkin Patch, but it never materialised as described. It was perhaps the first sign that Alceon’s approach, while logical on paper, was not delivering in practice. Cracks begin to appear in the facade In January 2021, Facioni departed Alceon Group to launch ACTA Capital, a specialist private-equity firm with a dual focus on retail and consumer brands and providing growth capital across industries.  However, through ACTA Capital, he continued to “co-manage” Alceon’s investments in Mosaic Brands and Alquemie Group, an entity created by Alceon in 2018 to house its retail investments. He also kept looking for acquisition opportunities. In May 2022, Alquemie bought General Pants Co from the Smorgon family, in a reported A$60 million-plus deal, naming the fashion chain’s CEO Sacha Laing as its new boss.  Shortly after his appointment, Laing shared his plans for Alquemie Group in an interview with Inside Retail: “Coming together as a broader group, there’s a transformation journey and plan that we have underway in terms of consolidating, where it makes sense, our shared services to leverage the scale of the group.” But even as Alquemie was sticking to the playbook of cutting costs and centralising backend operations, cracks were beginning to appear in Alceon’s first and biggest retail investment, Mosaic Brands.  Pandemic-related lockdowns and store closures had devastated the apparel retailer, which catered to an older demographic who largely shopped in-store. Group revenue in FY23 was A$495.3 million, down from A$881.9 million in FY19.  In April 2023, Mosaic placed EziBuy into administration, and it was eventually liquidated, owing creditors more than A$100 million.  Still, Evans, the CEO, tried to reassure shareholders in that year’s annual report, stating that Mosaic had “a clear vision as to where future growth opportunities in the retail landscape sit.” That vision would remain unrealised. The downfall of Mosaic Brands At the start of last year, Mosaic made some significant leadership changes. Evans resigned after 10 years at the helm, naming Erica Berchtold, former CEO of The Iconic, as his successor. Berchtold officially joined Mosaic Brands last April, then, in June, long-time CFO Luke (Luka) Softa resigned.  Just days before Softa’s resignation, Mosaic shared that it was anticipating a recovery in the first half of FY25; however, the retailer never lodged its FY24 results. Instead, it entered voluntary administration in October 2024, and after failing to find a buyer, it ceased trading in late April.  In total, Mosaic Brands closed more than 651 stores across Australia, and 250 people in the head office and 2500 workers across stores lost their jobs. Administrators revealed that the company owed between $361 million and $392 million to creditors. The saga is still unfolding. In a report on June 13, the administrators issued a preliminary finding that Mosaic Brands may have been operating while insolvent since December 2020.  If true, there could be a legal case brought against some or all of the directors, including Facioni, Evans, Softa and Berchtold – potential consequences include civil penalties, compensation proceedings and criminal charges.  The report also highlighted possible voidable transactions, including uncommercial transactions related to Mosaic’s acquisition of EziBuy.  On July 1, creditors voted to place Mosaic Brands into liquidation, with the company’s existing administrators, FTI Consulting, appointed as liquidators.  They will now continue their statutory investigations into the matters raised in the June report, including allegations of trading while insolvent and possible voidable transactions. If they are successful in proving that an uncommercial transaction took place, they could recover proceeds after costs for distribution to unsecured creditors. Alquemie Group’s shrinking retail portfolio Meanwhile, Alquemie Group’s once-expanding portfolio of retail investments has been whittled down to just three: General Pants, a private label apparel brand called Insight and the license to operate Lego Certified Stores in ANZ.  In May, the company quietly sold SurfStitch and Ginger & Smart. Shortly thereafter, it confirmed the closure of National Geographic stores in the ANZ market, just over a year after launching the concept in partnership with The Walt Disney Corporation.     SurfStitch and Ginger & Smart have since been placed into voluntary administration by their new owner, Best Markets, which Inside Retail was first to report. Pumpkin Patch has never reappeared on the market.  ASIC records show there were signs of trouble at least two years ago, when Alquemie reported a $5.4 million loss before tax for the 12 months ending July 2, 2023.  It blamed “the economic impacts of market uncertainty impacting customer sentiment across the broader retail industry” and restructured its operations and reduced its cost of doing business, claiming the benefits would be realised in its financial performance going forward.  However, the company does not appear to have filed its FY24 report with ASIC or lodged any other financial statements with ASIC since November 2023.  For the past year, Alquemie Group has been led by former Mosaic Brands boss and “turnaround specialist” Evans, who was named CEO in June 2024. He described it as “one of the most exciting leadership roles in the sector.”  ‘Challenging at the best of times’ Inside Retail contacted Facioni and Evans at Alquemie Group for comment on the key factors that led to the decline of Mosaic Brands, EziBuy, Pumpkin Patch, SurfStitch and Ginger & Smart, and asked for examples where their turnaround strategies had been successful.  In a longer response, an Alquemie Group spokesperson stated, “There have been 15 major Australian retailers that have gone into administration in the last two years and a similar number of international retailers from Debenhams to Brooks Brothers. In the last 12 months two of Australia’s largest listed corporations have chosen to close once highly successful large-scale online retail businesses. “[…] the reality is, retail turnarounds are challenging at the best of times, and the past five years have certainly not been the best of times for Australian retail. “More recently, like every other retailer locally and internationally, the Group has been required to make business decisions as to the scale and market position of specific brands and platforms continuing to co-exist in a world now dominated by a handful of dominant global online retailers.  In this environment, standing still is not an option. “Despite these challenges and after making some tough decisions to realign for a very different retail environment, the Group is opening stores for its major brands and expanding its operations.” Inside Retail has requested further information about these store openings. A track record of failed turnarounds  For a time, Alceon Group and its spin-off Alquemie Group were seen to be saviours of Australian retail – rescuing struggling businesses and promising to return them to growth through shared sourcing and scale.  But the demise of Mosaic Brands and EziBuy, the disappearance of Pumpkin Patch and the sale of SurfStitch and Ginger & Smart tell a different story. And now, many in the industry are asking why so many of Alceon and Alquemie’s proposed retail turnarounds failed.  Besides the small group of leaders at the top, one common denominator is the classic private-equity playbook: acquire a declining company for a bargain with the promise of a big return once it’s back on track, or better yet, acquire several companies and combine them in the hopes that the whole will be greater than the sum of its parts. At least in the case of Alceon Group and Alquemie Group’s retail ventures, that approach has proven unsuccessful, more often than not.