A perfect storm forces kikki.K into receivership
11 March 2020, Written by David Simmons
What began as a dream for kikki.K founder Kristina Karlsson (pictured) could be coming to an end as the Australian retailer falls into receivership.
The stationery retailer is the latest company to face potential collapse with receivers Cor Cordis being appointed on Tuesday.
"It is with profound regret and sadness that we take this action," says founder Karlsson.
"This business began with a young girl's dream 20 years ago and became an international success story with customers in over 150 countries."
With receivers now appointed more than 450 employees in 65 stores in Australia, the United Kingdom, New Zealand, Singapore and Hong Kong are at risk of losing their jobs.
Co-founder, CEO and Karlsson's life partner Paul Lacy says the appointment of administrators and receivers was the result of a "perfect storm".
"We'd not long started our store rollout in the UK when Brexit hit and the economic uncertainty that came with it," says Lacy.
"Then there was a huge rates overhaul in the UK which lifted rates on our stores by hundreds of thousands. At the same time, we like all retailers have been dealing with the profound structural change of people moving their shopping habits to buy more online and less in physical stores requiring strong long-term investments in digital transformation."
"Then came the social unrest in Hong Kong which ate into our sales in Asia, and like many other retailers our Christmas sales globally were down substantially. For us, as a gifting business, we rely on that season to set us up for the year ahead."
He describes a "triple-whammy" of soft consumer demand, the business impact of the bushfires and more recently the unprecedented impact of coronavirus.
"This unprecedented line-up of external factors, particularly in recent weeks, has really taken its toll. As we looked ahead we just didn't have the certainty we could keep going so have had to take this decision," he says.
The receivers will now be working with kikki.K management to develop a plan to restructure the business and enhance value, while also investigating the potential sale of the company.
It will be business as usual in stores and online for the time being, with kikki.K continuing its mid-season sale with 30 per cent to 70 per cent off selected items.
Karlsson says she hopes there will be a solution soon to continue her dream of empowering others around the world.
"My dream 20 years ago was to create a beautiful brand that through Swedish design would inspire and empower people the world over, in small ways and big, to live their best life every day," says Karlsson.
"It's always been about doing something meaningful in the world while following my passion for creating beautiful everyday use objects."
"There is still an amazing business opportunity with more than 3.7 million loyal customers on our data base, over 20 million people a year visiting our physical and online stores and strong opportunities for growth into new product categories. But obviously it requires a big re-set and a buyer who understands the opportunity."
Business News Australia
Author: David Simmons