Vienna. Kika/Leiner,the well-known Austrian furniture retailer,has officially entered bankruptcy for the second time,following unsuccessful restructuring efforts. The company announced on December 4, 2024, that it has withdrawn its restructuring plan, leading to the closure of its remaining 17 branches and the loss of approximately 1,350 jobs. The insolvency administrator will now oversee a structured liquidation process, with liabilities estimated at around 139 million euros. This latest bankruptcy comes after a tumultuous period marked by ownership changes and previous insolvency in 2023, which resulted in notable layoffs and branch closures. Creditors are urged to submit their claims to the District Court of St. Pölten by January 10, 2025, as the company navigates this challenging financial landscape.
Kika/Leiner’s Second Bankruptcy: Insights from Industry Experts
Editor: Today, we delve into the recent bankruptcy filing of kika/Leiner, Austria’s well-known furniture retailer.To gain insights into the implications of this important development,we have with us Dr. Eva Klein, an expert in retail economics and business restructuring. Thank you for joining us, Dr.Klein.
Dr. Klein: Thank you for having me.
Editor: Kika/Leiner has officially filed for bankruptcy for the second time, stating on December 4, 2024, that it would withdraw its restructuring plan. What are the main factors that contributed to this latest insolvency?
Dr. Klein: Kika/Leiner’s situation can be attributed to a combination of factors. The company has struggled with considerable liabilities, estimated at around 139 million euros, which indicates significant financial mismanagement and mounting debts. Moreover, the company’s attempts at restructuring previously, especially under new ownership, were evidently not successful. Ownership changes can often lead to instability if not managed properly.The closure of its remaining 17 branches and the loss of approximately 1,350 jobs makes it clear that the restructuring efforts were inadequate.
Editor: These closures and job losses are indeed troubling. What does this mean for the workers and customers impacted by Kika/Leiner’s bankruptcy?
Dr. Klein: Regrettably, the repercussions are immense for both employees and customers. For over 1,300 workers, this means immediate unemployment and uncertainty in the job market, especially within the retail sector that has already faced challenges post-pandemic. For customers,the closure of physical stores may reduce options for purchasing furniture,pushing them towards online alternatives. With only one more day for creditors to submit their claims, the focus will now shift to liquidation, which typically offers little return to employees or smaller creditors.
Editor: Kika/Leiner was Austria’s second-largest furniture retailer after XXXLutz. What does this bankruptcy signify for the broader furniture retail industry in Austria and possibly in broader Europe?
Dr. Klein: This bankruptcy symbolizes a critical point for the furniture retail industry, particularly as economic conditions fluctuate. It showcases the challenges that brick-and-mortar retailers face in adapting to changing consumer behaviors,especially with the rise in online shopping. Kika/Leiner’s struggles may lead other retailers to reevaluate their operational strategies to avoid similar fates. Moreover, we might see increased mergers and acquisitions as stronger players move to absorb the weakened competition, prompting market consolidation.
Editor: As Kika/Leiner moves into liquidation, what practical advice would you provide to potential creditors and employees who are affected by this situation?
Dr. Klein: For creditors, submitting claims promptly to the District Court of St. Pölten by January 10, 2025, is crucial. They should prepare to document their claims thoroughly, as the likelihood of recovering debts may be low. For employees, utilizing resources such as local employment services will be vital for securing new job opportunities. Networking and leveraging any severance benefits can also provide a buffer during the transition.
Editor: Thank you, Dr. Klein, for your insights into this complex situation. It’s been enlightening to discuss the implications of Kika/Leiner’s insolvency, as well as the overarching trends in the furniture retail industry.
Dr. Klein: My pleasure. it’s essential for the industry to learn from these occurrences to foster more sustainable business practices moving forward.
Editor: We appreciate your expertise and look forward to keeping our readers updated on developments in the retail sector.