Owner of Katies, Noni B and W. Lane fined $25 million for breaching consumer law

A court case that began 16 months before defunct fashion retailer Mosaic Brands went into liquidation has resulted in $25.05 million worth of penalties for breaching consumer law, including failing to deliver items within a reasonable time despite being paid.

The Australian Competition and Consumer Commission (ACCC) filed proceedings against Mosaic Brands in March 2024, before the ASX-listed company entered voluntary administration In October of that year. What followed were the staggered store closures across its network of brands including Katies, Rivers, Millers, Noni B and others.

It marked a fall from grace for the group which at its peak operated about 800 stores across Australia and had about 7.8 million online members.

Administrators would later determine the company was often competing against itself for the same customers within shopping centres, struggling with a high-cost business characterised by a lack of product differentiation. The group finally entered liquidation in July this year after failing to secure a deed of company arrangement (DOCA) to keep it afloat.

Amidst the voluntary administration, the Federal Court granted the consumer watchdog leave to continue proceedings against Mosaic Brands, and since January 2025 the matter has been undefended.

Today the court has found that Mosaic Brands breached the consumer law over a six-month period when it failed to deliver 739,114 items across its nine brands within the delivery times specified on its websites. Of these items, 4,213 were not delivered at all.

In doing so, Mosaic Brands was found to have wrongfully accepted payment from consumers and engaged in misleading or deceptive conduct. 

"Delivery times matter and it is unacceptable to mislead consumers about this aspect of a sale. A large number of Australians – and close to a quarter of online goods ordered from the Mosaic Group were affected by it,” ACCC deputy chair Catriona Lowe said.

“Our investigation revealed that more than half of the items in question were dispatched from Mosaic Brands’ warehouses 30 or more days after the order date, and about one-third were dispatched 40 or more days after the order date.

“One person who reported to us experienced the dual disappointment of never receiving the goods they’d paid for and then having to wait six months for a refund."

The almost 740,000 goods that the Court found Mosaic Brands wrongfully accepted payment for made up almost one-quarter of the total online items ordered and dispatched by Mosaic Brands during the six-month period.

In addition, Mosaic Brands did not have reasonable grounds for making delivery time representations on its websites due to Mosaic’s deficient and defective warehousing and logistics systems and operations.

The Court also found that Mosaic breached consumer law when, over a 13-month period between 2021 and 2022, it stated on eight of its brands’ websites that consumers were only eligible for a refund for a faulty item if they sought the refund within six months of the purchase date.

Under the Australian Consumer Law, a consumer’s right to a refund for a faulty item does not have a set time limit: it applies for a “reasonable time”, which depends on factors such as the price and quality of the item.

“All online retailers should be aware that excessive delivery delays after accepting payment can lead to penalties of this magnitude,” Lowe said.