In a major blow to the global garment industry, Australian fashion company Mosaic Brands has entered voluntary administration, leaving a trail of unpaid debts and jeopardizing thousands of jobs. The move impacts 23 factories across Bangladesh, India, and China, which are owed a collective $30 million. This crisis highlights the fragile relationship between international brands and their overseas suppliers, with workers in Dhaka’s industrial heartland facing the most severe consequences.
A Ripple Effect of Financial Distress
The immediate fallout began after Mosaic Brands, the parent company of labels like Millers and Rivers, failed to make a $2.5 million payment to Padma Satel Arab Fashions, a major supplier in Dhaka. This single default triggered a widespread financial crisis for the factory and its 3,000 employees.
“If I don’t get the money from Mosaic, I don’t think we can survive,” said Jabed Ahmed, the director of the factory. He explained that Mosaic had cited poor sales while encouraging them to continue shipments with promises of future payment that never materialized.
For workers like 26-year-old Yasmin Laboni, the news is devastating. “Everyone will be affected by this non-payment,” she said, expressing fears about her ability to cover basic medical expenses and clothing for her family. The dependency on timely payments from foreign companies is a stark reality for the entire community.
The Human Cost in Bangladesh’s Garment Hub
Bangladesh’s garment sector is a cornerstone of its economy, but the workers who power it are incredibly vulnerable. The industry employs 4.4 million people and accounts for 85% of the nation’s export revenue, a staggering $34 billion annually.
The situation is particularly dire for the women who make up the vast majority of the workforce.
- Approximately 80% of garment sector employees in Bangladesh are women.
- Many workers earn a minimum wage of around $6 per day, which is already considered a poverty wage.
- The non-payment for fulfilled orders means many have essentially worked for free, pushing them further into financial instability.
Mohammad Alam Mia, a factory manager, voiced a simple but powerful plea on behalf of his colleagues: “All we ask is that foreigners pay on time.” His concern is that the failure of Mosaic Brands could lead to mass layoffs, leaving countless families without any source of income.
Mosaic’s Restructuring Plan Crumbles
The financial collapse came just a month after Mosaic Brands announced a major restructuring plan. In September, CEO Erica Berchtold stated the company would shutter five of its brands to focus on its core labels and better serve Australian customers. The goal was to “accelerate the rationalisation plans” and secure the company’s future.
However, this strategy was not enough to prevent the company from filing for administration in October. FTI Consulting has been appointed as administrators to assess the business, with options ranging from asset sales to complete liquidation.
| Brand | Status |
|---|---|
| Rockmans | Shuttered |
| Autograph | Shuttered |
| Crossroads | Shuttered |
| W.Lane | Shuttered |
| BeMe | Shuttered |
| Millers | Continued |
| Noni B | Continued |
| Rivers | Continued |
| Katies | Continued |
Cries for Accountability and Fair Practice
Suppliers are now speaking out against what they describe as predatory business practices by Mosaic Brands. Ohmar Chowdhury, owner of Hydroxide Knitwear, called the situation “criminal fraud,” claiming the company pressured suppliers to accept unsustainable discounts that crippled them financially.
The Bangladesh Garment Manufacturers and Exporters Association has expressed deep concern, warning that Mosaic’s actions set a dangerous precedent. Mohiuddin Rubel, a former director of the association, criticized the lack of intervention from Australian authorities. “If one Australian brand doesn’t pay, despite raising this to the Australian High Commission several times, what does it say about Australian standards and not wanting to take responsibility?” he questioned.
The emotional toll on factory owners is immense. Sarwar Hossain, manager of Sultana Sweaters, shared his despair, saying, “I’ve thought about taking my life; this situation is unbearable.” His words reflect a sense of powerlessness felt across the industry.
An Industry on Edge
Oxfam Australia has condemned Mosaic’s failure to pay, highlighting the systemic exploitation within the fast fashion supply chain. “For Mosaic not to pay for orders already fulfilled, means they have essentially worked for free,” said Sarah Rogan, Oxfam’s advocacy lead, emphasizing the plight of workers already surviving on poverty wages.
As administrators at FTI Consulting determine the fate of Mosaic Brands, the future for thousands of workers hangs in the balance. The crisis has shattered trust, and suppliers are now hesitant to extend credit, creating further strain on the industry. The workers, who are the most affected, have a simple demand, best summarized by Yasmin Laboni: “We only want what we earned.”
