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kikki.K Enters Voluntary Administration for Second Time in Two Years
kikki.K has collapsed for the second time in two years, after it was acquired by Texas-based retailer, Erin Condren, in June 2020.
The stationery company, which was founded in Melbourne in 2001 by Kristina Karlsson and Paul Lacy, entered voluntary administration again after its recent sale to Texas-based Erin Condren Designs (EC).
kikki.K first entered voluntary administration in March 2020, owing $20 million to creditors. While it was sold in June 2020, the retailer has been unable to ‘withstand the massive impact’ of ongoing lockdowns in Australia, Singapore and New Zealand.
“It’s been a massive battle for business survival in recent months,” said CEO Paul Lacy in a statement. “We’ve taken numerous urgent steps to find a way through but the sheer impact and magnitude of lost sales due to COVID lockdowns and the risks for directors associated with continuing to trade with such significant uncertainty ahead gave no choice.”
The retailer is currently in review, working with administrators Liam Healey and Quentin Olde from Ankura, and will commence an expression of interest with potential buyers. “We are undertaking a review of the business and are working with the directors, owners and other stakeholders to assess the options available,” explained Healey.
The business will continue to operate as usual in the meantime, the administrators have said. “It’s yet another tough moment in our amazing journey together, and we understand and deeply regret that there will be profound impacts for many of our amazing team members and our partners, suppliers and shareholders,” the company explained.
“The loss of revenue from the forced and extended closure of so many of our stores due to the COVID pandemic as part of the government ordered lockdowns has taken a direct, massive and insurmountable toll. With no clear end in sight to lockdowns, EC have decided that in these unprecedented and extraordinary circumstances the risks are too great for them to continue to fund the business.”
The result of this administration is a ‘direct consequence’ of the pandemic, the business said. Furthermore, the “unprecedented, devastating financial consequences of past and current store lockdowns, and the prospect and risk of extended closures with no clear end in sight. It has simply not been possible to get through such a seismic event outside of our control.”
kikki.K currently has 36 stores across Australia and New Zealand, of which many have closed, with 300+ staff stood down as a result. While its online store is up and running, its sales are not sufficient enough to sustain ongoing growth for the business.
Tonia Misvaer, a spokesperson for EC explained that the decision was needed to help the company move forward. “Due to the prolonged challenges from the pandemic, kikki.K will proceed into voluntary administration in order to determine the best path forward for the brand,” she said to AFR. “While it is not the outcome we hoped for, we will work closely with the administrators to support our team members during this process as well as explore all possible options for this beloved brand.”
Lacy and Karlsson believe that there will be strong expressions of interest from buyers, and said they will assist the administrators at Ankura as best they could.