1,400 employees affected
Austrian furniture chain Kika/Leiner is insolvent
Updated on November 12, 2024 – 6:29 p.mReading time: 2 min.
The Austrian furniture chain Kika/Leiner has gone bankrupt for the second time. 1,400 employees are threatened with dismissal.
On Thursday, the management of the Austrian furniture store chain Kika/Leiner filed for bankruptcy. The company announced this move in a press release. “We did everything humanly possible to ensure the company’s continued existence, but under the current conditions, the renovation of the seriously ailing furniture store was unfortunately not possible,” the statement said.
One of the main reasons for the bankruptcy was the previous bankruptcy proceedings last year, which caused lasting damage to the brand. The Signa bankruptcies have repeatedly led to speculation and customer inquiries as to whether Kika/Leiner was also affected. In addition, the general reluctance to buy over the last two years has exacerbated the situation.
Kika/Leiner further explained that the cost increases in all areas as well as in the last collective bargaining negotiations had further severely limited the company’s scope for action. In the future, a liquidator will take over the helm. Around 1,400 employees are affected by the bankruptcy.
In 2023 it became known that the former owner of the furniture store chain, the Signa Group, was selling the operational business of Kika/Leiner in addition to the real estate. The contract was awarded to a management team led by Hermann Wieser. In June, the group filed for restructuring without self-administration, which led to the closure of 23 of 40 locations and the termination of 1,900 employees.
According to information from the Austrian ”Standard”, the chain’s management ordered on October 25th that vouchers could no longer be sold. Online sales have also been temporarily suspended. A new web shop was originally supposed to open in the first quarter of 2025 - this will now no longer be possible.
Interview with Dr. Sofia Müller, Economic Expert
Time.news Editor: Good afternoon, Dr. Müller. Thank you for joining us to discuss the recent bankruptcy of the Austrian furniture chain Kika/Leiner, which affects around 1,400 employees. This is quite a significant development in the retail sector, isn’t it?
Dr. Müller: Good afternoon, and thank you for having me. Yes, it is indeed a concerning development. The implications of this bankruptcy extend beyond just the affected employees; it signals deeper issues within the retail market and consumer behavior, particularly in industries like furniture.
Time.news Editor: Kika/Leiner has declared bankruptcy for the second time. What do you think led to this situation, especially considering they stated they tried everything to ensure the company’s continuation?
Dr. Müller: There are a multitude of factors at play. Kika/Leiner has faced intense competition from both local and international firms, along with changing consumer preferences that have shifted towards online shopping. Additionally, the lingering impacts of inflation and economic uncertainty likely made it difficult for the company to sustain itself. Their previous bankruptcy proceedings would have also hindered their ability to rebuild and restructure effectively.
Time.news Editor: It’s alarming to see 1,400 employees threatened with dismissal. What are the broader implications for the labor market in Austria?
Dr. Müller: When a major employer like Kika/Leiner goes under, it has a cascading effect. The immediate impact is job loss, but there are also psychological and economic ripple effects. Unemployment rates could see a spike, consumer spending may drop due to reduced income in the community, and there might be increased pressure on social services. Furthermore, this could also lead to a loss of consumer confidence, which is critical for recovery in the retail sector.
Time.news Editor: You mentioned changing consumer preferences—how important is it for traditional retailers to adapt to these trends?
Dr. Müller: Adaptation is vital. Traditional retailers must innovate and integrate technology into their business models. This means investing in e-commerce platforms, enhancing customer experiences both in-store and online, and leveraging data analytics to understand consumer needs better. Retailers who fail to do so risk becoming obsolete, as the retail landscape is becoming more competitive and digital-centric.
Time.news Editor: What do you believe will happen next for Kika/Leiner’s employees and the brand itself in the wake of this bankruptcy?
Dr. Müller: The immediate future is uncertain. For the employees, facing potential layoffs is understandably devastating. Some may find opportunities in other retail settings or sectors, while others could face challenges due to the economic climate. As for the brand, there are possibilities for restructuring or acquisition by another entity, but that largely depends on market interest and the viability of their business model moving forward.
Time.news Editor: It sounds like a complex situation. What advice would you give to employees and those in similar sectors facing uncertainty due to such corporate challenges?
Dr. Müller: Resilience is key. Employees should start to explore new skillsets and job opportunities, perhaps looking into sectors that are seeing growth, such as tech or healthcare. Networking is invaluable during such times—connecting with former colleagues and industry professionals can open doors. Additionally, advocating for better conditions and support within their current organizations can also help in navigating these challenges.
Time.news Editor: Thank you, Dr. Müller, for your insights into this important issue. It’s crucial to highlight the human aspect during these corporate challenges.
Dr. Müller: Thank you for having me. It’s essential that we continue to discuss and address the implications of such bankruptcies, not just for businesses but for the workforce and the community as a whole.