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Another major Australian retail chain has collapsed, with the receiver warning that more could follow, as consumer confidence remains shaky.
Key points:
- Administrators Cor Cordis hope to close some stores or sell the chain
- The chief executive said the company had been caught in a perfect storm of soft consumer demand, bushfires and coronavirus
- At least six other retailers, including Bardot, have also gone under or been forced to close stores this year
Almost 500 jobs are in limbo after Melbourne-based stationery chain kikki.K was placed into voluntary administration.
The chain has 65 stores across Australia, Singapore, Hong Kong, London and New Zealand, as well as an online store.
Barry Wight from the company's receiver, Cor Cordis, told the ABC that the retail chain has been struggling for some time but that poor summer trade had likely exacerbated its problems.
"There really just wasn't enough spending money during the December and January period," Mr Wight said.
"Certainly we've had an impact of bushfires in December and then most recently the impacts of the coronavirus."
Mr Wight said the chain made almost $70 million in sales last year.
"It's got a lot going for it but the recent events have made it too difficult to continue," he said.
Mr Wight said all of the chain's stores remained open and nobody had lost their jobs.
Cor Cordis is investigating the possibility of selling off the whole chain or closing some stores.
"Everything is on the table," he said.
'Perfect storm'
As receivers, Cor Cordis will now control the company while its future is determined.
In a statement, kikki.K founder Kristina Karlsson said the company had tried everything in its powers to save the business.
"It is with profound regret and sadness that we take this action," Ms Karlsson said.
The company's chief executive Paul Lacy said the chain had been "caught in a perfect storm", with its British stores affected by Brexit woes and its Hong Kong outlets rocked by ongoing protests there.
"And, finally 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 said.
"This unprecedented line-up of external factors, particularly in recent weeks, has really taken its toll."
Coronavirus adding to the difficult retail landscape
Since the start of 2020, a raft of Australian businesses have gone under or been forced to close stores, including big names Harris Scarfe, Ishka, EB Games, Bardot, Jeanswest and Colette.
"We've now seen a long list of retailers that have entered the formal insolvency process," Mr Wight said.
"We've long been predicting that there's a slow slide of a lot of these retailers in a very difficult environment where consumer spending is not strong."
Mr Wight said shaky consumer confidence due to coronavirus was only making things harder for retailers.
"It's definitely not helping," he said.
"How prolonged this coronavirus outbreak will extend, we don't know.
"Whilst we don't want to be hysterical about the outbreak, it is certainly not helping foot traffic."
Topics: retail, industry, business-economics-and-finance, bushfire, fires, disasters-and-accidents, health, respiratory-diseases, diseases-and-disorders, melbourne-3000, vic, australia
First posted