Berchtold lands on her feet as Mosaic Brands names former Iconic boss as new CEO

After being thwarted from taking on the top job at Best & Less due to a takeover last year, Erica Berchtold has been appointed CEO of specialty fashion retailer Mosaic Brands to succeed outgoing boss Scott Evans who today announced his intention to retire.

Berchtold, the former CEO of The Iconic, takes the helm at Mosaic Brands on a high note for the company today also revealed a 38 per cent increase in net profit after tax to $5.4 million for the first half of FY24.

Berchtold will immediately take over from Evans, who has led the company for the past decade and is credited with getting the Sydney-based company back on the growth track following the disruptions caused by COVID.

For Berchtold, a seasoned retail executive, it’s a clear sign of her resilience as she dusts herself off from the Best & Less rebuff, which was triggered by the company’s takeover by Brett Blundy and Ray Itaoui.

Itaoui assumed the role of Best & Less CEO following the takeover.

Mosaic Brands chairman Richard Facioni says Berchtold brings more than 20 years of retail experience in ‘customer-facing and digital retail’ to the company, including a stint as managing director of Rebel Sport.  

“As we accelerate our big box and digital strategy, Erica not only has the right skillset to drive the future direction of the group but also a strong understanding of our customers as a former general manager of two of our brands,” says Facioni.

“I look forward to working with Erica as she takes the group forward.”

Berchtold has already indicated the future direction of Mosaic under her leadership in what she describes as ‘an increasingly dynamic and growing market’.

“Two thirds of all spending on clothing is now by Australian consumers aged 35 and older,” says Berchtold.

“Your average 50-year-old spends more on clothes each year than a 20-year-old.  

“The huge shift to online in recent years also provides an enormous amount of data and information about those consumers’ shifting expectations and choices which will drive our strategy and direction. 

“That’s why this is a really exciting opportunity and time to be leading a true omni-channel retailer.   “Low price is also not the antithesis of style. I will be looking to amplify the pride in our brands and the people behind them, in providing affordable fashion for all.” 

Facioni paid tribute to Evans’ leadership of the company which has resumed its growth trajectory after returning to profit in FY23.

“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,” says Facioni. 

“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.

“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.”

Facioni notes that Mosaic Brands, formerly known as Noni B, experienced five consecutive years of growth and profitability under his stewardship, until COVID hit the business.

“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. 

“The board thanks him for his vision and his relentless commitment and drive, through good times and some very tough times.”

Evans says the Mosaic Brands he walked into over 10 years ago is ‘radically different today in terms of its stores, digital offering and ever broadening customer base’.

“The first turnaround was about growth and returning to profitability. The second COVID-related turnaround - survival then revival.

“Running retail in Australia is a great challenge and I am proud to say the group is once again profitable and on a solid operational and financial foundation.”

Evans says the latest half-year result marks ‘a key turning point for Mosaic Brands’.

“A pre-COVID track record of profitability has resumed as seen over the recent few years,” he says. “The group has delivered a $13.5m improvement over the last six 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.”

Mosaic Brands’ 38 per cent increase in interim profit was achieved despite a 10 per cent fall in revenue to $254.45 million thanks to a reduction in expenses.

The company says sales for the first eight weeks of calendar 2024 are in line with expectations.