'Berserk' factories, debts and excuses: Suppliers of collapsed Australian fashion giant speak out
Annabell Mihic (left) and Jayson Haydon say Mosaic Brands' inability to pay their invoices on time had mammoth impacts on their businesses. Source: Supplied There will be more to come on the collapse of Mosaic Brands in Dateline's two-part investigation, The Cost of Doing Business, coming soon to SBS and SBS On Demand . Annabell Mihic loved fashion. In 2001, while pregnant with twins, she set out to make her dream a reality, launching her first clothing business, Faith Fashion, with just $600. By 2014, she'd found success working with factories in Bangladesh sourcing designs, fabrics and clothes for retail companies Pretty Girl Fashion Group and Specialty Fashion, owners of some of Australia's major heritage brands such as Noni B, Katies, Rockmans and Millers. "I picked up my children from school, every mother was wearing a pair of jeans from Rockmans in a different colour, and a sweater or knitwear that was just beautifully created by the team," Sydney-based Annabell told Dateline.
Jayson Haydon, also in Sydney, was another riding the high of Australia's booming fashion scene with his company On Trend. Focusing on factories in China, he was also supplying Pretty Girl Fashion Group and Specialty Fashion, making clothes for brands such Noni B, Rockmans, Autograph, Millers and W-Lane. "We would have to get all of the patterns made — everything that they needed — in China, all the trims, the buttons, the zippers, the cottons, whatever, for the garment supply," he told Dateline. "We had to make decisions in 10 minutes for $10 million. I just enjoyed all those aspects of it." Annabell and Jayson were among a handful of Australian entrepreneurs pioneering offshore manufacturing at a time when the country's fashion industry was experiencing rapid growth. Known as buying agents, they'd become essential middlemen to a new kind of supply chain, helping to connect big retailers with offshore garment factories to deliver high quantities of good-quality, low-cost clothes to Australian consumers. It was a ticket to success.
Jayson said his business "grew and grew and grew". "The first year in 2010 our turnover was $17k ... by 2012 it was about $3 million and about $5.8 million the year after that." "If On Trend was famous for anything, it was always on time, good quality, no drama, good communication and honesty." But Annabell and Jayson say things started to unravel for them after a new retail giant started to emerge from 2014, when Scott Evans, a retail executive and Richard Facioni, a former Macquarie Group banker, joined forces to buy up the fashion companies Annabell and Jayson once supplied. With backing by the financier Alceon Group, Evans and Facioni first bought Noni B, becoming its CEO and chairperson respectively. Then between 2014 and 2019, with Luka Softa as their CFO, they continued a mission to become Australia's largest fashion retailer by snapping up many of the country's mid-tier fashion groups — Pretty Girl Fashion in 2016, then EziBuy in 2017 and Speciality Fashion Group in 2018 — before merging and rebranding them all under one name: Mosaic Brands. It was during this takeover phase that Annabell and Jayson said everything changed.
Annabell and Jayson say the day Evans and Facioni took over Pretty Girl Fashion Group their payment terms were immediately extended. "We received a phone call from a buyer in Pretty Girl Fashion Group who said there's been a takeover and our payment terms have completely changed," Annabell said. "It's now 120 days." These new contract negotiations meant Annabell was no longer paid 30 days after her goods were shipped. She now had to wait 120 days.
We received a phone call from a buyer who said our payment terms have completely changed. Annabell Mihic But it didn't stop there. Annabell says her terms were later extended to 200 days and, in some circumstances, more than 300 days — meaning it was almost a year before she would receive payment for the goods she supplied. The Council of Small Business Organisations Australia has advocated for 30-day payment terms as an industry standard for small businesses, arguing it's crucial for their financial health. This extension of payment terms placed enormous pressure on Annabell's supply chain. The factories she worked with overseas, their workers and material suppliers were all now waiting longer to get paid too. "It's a vicious cycle," Annabell said. "I can't give the money to the factories. [Which means] the factories can't open letters of credit [with their banks] for the goods that they are going to make. It was a nightmare."
Annabel and Jayson say they signed up to Mosaic Brands' terms because the group now owned all the brands they supplied. Jayson said the situation placed incredible pressure on his business and the factories he worked with, which refused to supply him the goods he needed without payment. "You have to dance with your finance company ... so they understand you're under duress. "Factories go berserk ... trying to hold you [to] ransom."
Factories go berserk ... trying to hold you [to] ransom. Jayson Haydon These lengthy payment terms benefited the buyers like Pretty Girl Fashion and latterly Mosaic Brands by freeing up cash for their business. But multiple sources from within the fashion industry told Dateline these extended payment terms are untenable in an industry that relies on garment manufacturers taking on huge upfront costs to kickstart the production process, placing too much pressure on businesses throughout the supply chain. One industry insider said Mosaic Brands' extended payment terms: "have given the Australian fashion industry a bad name".
Come 2018, Annabell and Jayson told Dateline, they stopped being paid on time. Invoices with already-stretched payment terms would fall due, and they still would not see any money. When Annabell chased her payments, she received various excuses. "They couldn't find the invoice, the invoices weren't matching ... We used our own forwarder, they couldn't find [the invoice]. We used their forwarder, they still couldn't find it," she said. Freight forwarders are a crucial link in the supply chain who help facilitate the movement of goods from origin to destination and, in turn, trigger when a payment should fall due. Annabel and Jayson said they found themselves in a cycle that ultimately ran them into the ground.
They had mounting interest and debt with financiers, while factories and suppliers in Bangladesh and China were chasing them for their own payments. In response to their desperate requests to be paid, Annabell and Jayson said they were met with endless excuses from Mosaic Brands. Annabell said she felt financially intimidated, trapped and like she was to blame. "Nothing about how I have been treated has been normal to me. I don't feel that any other retailer, Australian or international, that I've worked with has ever done that."
I don't feel that any other retailer ... that I've worked with has ever done that. Annabell Mihic By 2020, Jayson said Mosaic Brands owed him $8 million in unpaid invoices. The following year, in 2021, he was forced to put his company On Trend into voluntary administration and ultimately, liquidation — selling everything he could to cover his debts in Australia. But he could never pay back the companies he owed money to in China. "If I won Lotto, I would just give 'em the money. But I don't have that sort of money. US$6 million is a lot of dollars and ... I'd already sold everything. I sold cars ... anything that I could liquidate. I just kept my home, " Jayson said.
He added that some of the factories in China were able to recoup their money through insurance, but others went under. Dateline sought comment from Evans, Facioni and Softa, but they all declined.
A year after Jayson, Annabell lost everything too. In 2022, she placed her business Faith Fashion into liquidation. For Annabell, things reached their worst when she was owed around US$8 million in unpaid invoices for goods supplied to Mosaic Brands. "It's not my money, I'm just a glorified bank; I was the agent. It's the factories, it's the people that made the clothes. It wasn't my money, I let them down," Annabell said, crying as she recalled the responsibility she still feels.
It's the factories, it's the people that made the clothes ... I let them down Annabell Mihic To this day, she said she's still owed US$200,000 in missing unpaid invoices. Both Annabell and Jayson said Mosaic Brands' inability to pay their invoices on time was one of the main reasons they lost their businesses. Dateline has spoken to multiple suppliers to Mosaic Brands, not just in Australia but in China, Bangladesh and India, who all said they faced similar payment delays and mounting debts.
At least one factory owner in Bangladesh, one agent in China, and one factory in India say they have also lost their businesses due to Mosaic Brands' late payments and related issues. It's cost hundreds of jobs — and income for many more family members. Several other large and mid-size factories spoken to in Bangladesh, which employ thousands of local workers, say they are now also on the brink of collapse.
Last week, administrators for Mosaic Brands issued a preliminary finding that the company may have been operating while insolvent for four years before the company's collapse. Insolvency is when a company can no longer pay its debts and it's illegal to trade under these circumstances, according to the Corporations Act. There are serious penalties for allowing a company to trade while insolvent. Mosaic Brands' directors are yet to comment on the findings of the report. However, the report acknowledges that the directors sought to rely on safe harbour and COVID-19 provisions at times. If established, these protections could amount to a defence against any potential director liability for trading whilst insolvent.
A release issued on behalf of the Mosaic Brands board of directors last year, in response to previous reports the company had been using safe harbour protections, said its directors take their duties seriously, and did seek advice on the applicability and compliance with the safe harbour provisions. For Annabell, the FTI's latest report doesn't go far enough. "This failure did not begin with COVID. It began in 2018, when Mosaic acquired Specialty Fashion Group — a large and aggressive expansion that placed enormous pressure on cash flow and supplier relationships," she said. "What happened to me — and to so many other suppliers — was the result of sustained financial mismanagement ... and decisions that transferred risk down the chain while protecting those at the top."
Annabell said she raised her issues with the Australian Competiton and Consumer Commission (ACCC), Small Business Ombudsman and Australia's Securities and Investments Commission (ASIC) as early as 2019, which all amounted to nothing. She said the outcome has been a bitter pill to swallow. "We are not collateral damage. We are the people who made this supply chain work. We fulfilled contracts. We trusted in good faith — and we were left unpaid." Dateline contacted the ACCC, which said it currently has a matter before the courts with Mosaic Brands anad does not comment on complaints or potential investigations. The Small Business and Family Enterprise Ombudsman said it can't comment on the detail or outcome of individual cases. It also said the information Annabell Mehic provided them at the time helped "the advocacy work undertaken by ASBFEO on the Payment Times Reporting Scheme and our advocacy for improved payment times to help cashflow issues". An ASIC spokesperson said they are aware "that Mosaic Brands Limited went into external administration in October 2024 and of the Report to Creditors issued by the external administrator, FTI Consulting, on 13 June 2025 and they continue to monitor the matter". Watch now
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