Mosaic Brands has issued an operational update at its annual general meeting, flagging a return to profitability in FY23.
The Group has reported a return to in-store shopping, with year to date (YTD) sales to October end up 54% to $51 million on the previous corresponding period.
YTD comparative in-store sales up +21% with average store costs down a third of what they were pre-Covid levels, according to the retail group.
Chairman Richard Facioni told the meeting while the Covid virus remained in the community the removal of most restrictions has seen confidence slowly return among its customers.
“The lifting of a Covid cloud that has impacted the Group so substantially, is welcome for all stakeholders. For our shareholders, we are confident that will see a return to profit in FY23 for the Group.”
Facioni said the Group had reset its entire operations throughout the pandemic.
“This included rapidly building online and in-store operations that compliment rather than cannibalise each other,” he said.
Other changes included A $87 million reduction in costs in FY221, the closure of over 400 stores with uncommercial rents in the last three years and a multi- million-dollar investment in a state-of-the-art e-commerce distribution hub which opened earlier this year.
“The Group is, in my opinion, in its best shape operationally ever,” Facioni said.
Mosaic Brands CEO Scott Evans told shareholders that rising interest rates and inflationary forces would not hit the Group’s customers as hard as COVID.
“While not exactly welcoming those forces, we feel far more comfortable and confident in controlling them compared to Covid. Rising interest rates don’t close 1,000 stores overnight.”
Shareholders were told banking data provided to the Group indicated its customer set was likely to be less impacted by inflation.
Interest rate rises benefit many customers who had savings rather than mortgage repayments, according to the research.
Evans said the Group's BIG strategy would deliver 11 new Rivers megastores by the end of FY23 and the reset conducted over the past three years had resulted in the average cost of operating the Group’s 916 stores nationwide being a third less than they were pre-Covid.
Digitally the Group had gone from offering customers 150,000 SKUS in 2019 to 6.2 million today.
“As we embark on our all-important Christmas trade over the next eight weeks, we are fully prepared and ready to maximise this key trading period. All brands are well stocked with fresh summer collections, all stores are expected to trade unimpeded and our strategies for Black Friday are exceptionally well placed to deliver the result we expect,” Evans said.