Stationery business kikki.K has collapsed into voluntary administration for a second time in less than two years.
Kikki.K was founded in Melbourne in 2001 by by Kristina Karlsson and Paul Lacy and once had more than 100 stores, selling its Swedish-inspired notebooks, calendars, planners and gifts.
It was sold in June 2020 to Texas-based Erin Condren Designs in a deal to save its 65 stores at the time; however, the Australian Financial Review reports that backers of the US businesses have decided to no longer fund a restructuring process being undertaken at kikki.K.
Kikki.K now has 36 stores in Australia and New Zealand, over 20 of which are currently closed due to COVID-19 related restrictions — although the online store continues to trade. Close to half of the company’s 300 employees were stood down prior to the appointment of administrators, due to lockdowns in Victoria, New South Wales, the Australian Capital Territory and New Zealand.
In a statement provided to SmartCompany, the administrators said kikki.K had not been able to “withstand the massive impact” of lockdowns in Australia, New Zealand and Singapore, as the business relies heavily on store sales.
Administrators Liam Healey and Quentin Olde from Ankura said they will soon commence an expressions of interest campaign for the sales or recapitalisation of the business, and have already had interest.
“We are undertaking a review of the business and are working with the directors, owners and other stakeholders to assess the options available,” said Healey.
“In the meantime we are continuing to trade the businesses and negotiate support from key stakeholders in these difficult trading conditions.”
In a letter to staff on Monday, Karlsson and Lacy said the administration is a “direct consequence” of the pandemic and lockdowns, with retail sales particularly affected in Victoria, New South Wales and the Australian Capital Territory.
“Sadly this was one series of lockdowns too many for the business to withstand. It’s been a massive battle for business survival in recent months,” added Lacy in a statement to SmartCompany.
“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.”
Karlsson said many people had made an “extraordinary effort” to find a way through the challenging situation and the outcome is “deeply saddening”.
“My heart goes out to our team, our suppliers and creditors, shareholders and everyone impacted – and to the many businesses in the country who have been impacted like this and those who continue to battle with business survival as a direct result of COVID,” she said.
Tonia Misvaer, a director and representative of EC Designs, said the company will work with the administrators “to support our team members during this process as well as explore all possible options for this beloved brand”.
Kikki.k stores remain open in areas not affected by lockdowns, including in Queensland, South Australia, Western Australia and Singapore.