‘Perfect storm’ sends kikki.K into receivership

The luxury stationery business will be restructured, putting more than 450 equivalent full-time jobs at risk.

The collapse of kikki.K follows a string of retail changes and closures.

Luxury stationery business kikki.K has been placed into voluntary administration, in what CEO Paul Lacy branded “a perfect storm” of economic blows that have slammed the retailers.

The business, with a revenue of $70m last year, will be restructured, leaving more than 450 equivalent full time employees awaiting the unfolding of the collapse.

Cor Cordis have been appointed as receivers and managers of the Swedish design and stationery business which was established in 2001.

The collapse of kikki.K follows a string of retail collapses, including department store Harris Scarfe just before Christmas, Jeanswest, Colette by Colette Hayman, Laura Ashley and Co-op Bookshop’s Curious Planet retail chain and more recently homewares chain Ishka.

Barry Wight and Bruno Secatore have been appointed to manage the collapsed retailer, in what Mr Wight said may involve a restructure or a sale of the business.

“kikki.K has unfortunately joined what has become a long list of financially distressed retailers, given softening consumer spending, high leasing costs, compounded by a disappointing December / January trading period,” Mr Wight said.

“We’re now urgently working with management in respect of a plan to restructure the business and enhance value, whilst also investigating a sale of the kikki.K.”

Voluntary Administrators, J.P. Downey & Co, have been called in to oversee the process.

The move follows a lackluster January and December retail spending period, which saw retail trade fall 0.3 per cent on seasonally adjusted terms.

When called, staff at several kikki.K shops said they were aware of the receivership but that they were not permitted to say anything.

“We don’t have any more information than you do,” one said.

kikki.K co-founder Krstina Karlson said the company had tried everything to save the business but acknowledged “a big re-set” was needed to restructure it.

“There is still an amazing business opportunity with 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,” she said.

“We know that we’ve done everything in our power to avoid this outcome,” she said.

Mr Lacy blamed a barrage of international crises that have clipped sales and blown out costs, as well as disappointing Christmas sales for driving the business to the wall.

“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,” he said.

“We’ve had the triple-whammy of soft consumer demand, the business impact of bushfires and more recently the unprecedented and profound impact of coronavirus which is hitting so many businesses and countries so hard.”

Mr Lacy, who has been back in the role of CEO for the last 12 weeks, said he’d been working hard to save the business.

“I’ve identified many opportunities for improvement and been working at pace with our team to get back to the operational excellence we were always known for, but for now those initiatives are on hold as we move our focus to finding a new home for the brand and we hope, a new partner,” he said.

The business recently lost its CEO in Iain Nairn, who moved to take up the role of president at Hudson Bay, one of Canada’s most prominent department stores.

kikki.K launched in Melbourne in 2001, peaking with more than 100 stores around the world before contracting to 65, with outposts in the United Kingdom, New Zealand, Singapore and Hong Kong.