Underperforming women's wear retailer Mosaic Brands (ASX:MOZ) regards the six months to December as a 'turning point' for the embattled group.
Retiring CEO Scott Evans stated in commentary that the group is now in a better position than it has been for a while, with net profit after tax rising 38% to $5.4 million. There has been a sharp cut in inventory to more manageable levels, with only a 6.6% drop in comparable store sales.
The company reported that the net profit "was after absorbing a negative impact of $4.3m due to an adverse currency movement against the USD, with an EBIT of circa $13.1 million ($17.4 million normalized for USD impact), against $13.7 million in the December 2022 half."
Evans stated in Thursday's earnings release that "A pre-Covid track record of profitability has resumed, as seen over the recent few years."
"The Group has delivered a $13.5m improvement over the last 6 months in its net current assets position and projects further balance sheet improvements for the second half of FY24 and into FY25.
"The Group has also made significant progress in securing a refinancing package with Hilco Capital that we expect to sign in the coming weeks, which provides greater operational flexibility for Mosaic.
"Finally, we have also received in-principle agreement to extend or refinance the convertible notes with the noteholders representing the majority of notes on issue," said Mr. Evans.
The company announced Erica Berchtold's appointment as CEO of Mosaic Brands, with Mr. Evans retiring from the Group. Berchtold was previously named CEO of Best and Less, but it was taken over in 2023 before she could start, and before that, she led the online retailer, The Iconic, as well as served as managing director of Rebel.
Mosaic Brands Chairman Richard Facioni said in Thursday's statement, "Having put the Group back on its feet operationally, strategically, and financially, and having successfully navigated the Group through Covid, Scott informed the Board some months ago of his intention to retire."
"This facilitates a seamless leadership transition to Erica, with Scott stepping down post the release of these results before working through a three-month handover period," Mr. Facioni added.
"Over the past 10 years, Scott has overseen the amalgamation of nine underperforming and loss-making brands and has successfully integrated them and turned them around.
"The Group experienced 5 consecutive years of growth and profitability under his stewardship, until this was derailed by Covid.
"He has now set the business up for success in the coming years, under new leadership, by building an online operation from the ground up, resetting our store strategy, and broadening our customer base."
