We successfully restructured the business through a deed of company arrangement and ensured 25 stores remained open in Australia, along with 256 staff employed.
Renowned stationery and giftware brand, kikki.K owned and operated 56 retail stores in Australia and an e-commerce site that shipped to approximately 150 countries worldwide. kikki.K’s wholesale business also supplied major overseas department stores, stationery chains and travel retail chains.
Cor Cordis was appointed receivers and managers shortly before the COVID-19 pandemic. We successfully restructured the business through a deed of company arrangement (DOCA) and ensured 25 stores remained open in Australia, along with 256 full-time, part-time, and casual staff remaining employed.
The primary challenge for us was to identify the best possible outcome for kikki.K and maximise the chance for the business to continue trading during the COVID-19 lockdowns. Our priorities include implementing business stabilisation solutions, materially reducing costs, negotiating landlord relief, and optimising its vast store network.
We continued to trade on the business whilst expressions of interest were sought for the sale of business as a going concern. The unprecedented impact of the COVID-19 pandemic necessitated a re-assessment of the trading operations of the business and the strategy moving forward. As a result of government lockdown restrictions, Victorian retail stores were required to be closed. We boosted the capacity of kikki.K’s distribution services to support the increased e-commerce demand.
Due to the increased volume of online orders, employee shifts at the distribution centre were split into day and night to meet the demand of online orders, and employees of closed stores were redeployed to the distribution centre which was based in Victoria. COVID-safe protocols were put in place in stores and the distribution centre, now being essential component of the business, was cleaned and disinfected between day and night shifts.
We also undertook material cost reductions and successfully negotiated rent reductions, abatements and deferments with numerous landlords. Stores were progressively vacated and stock from these stores were moved to the distribution centre and employees were redeployed to other stores where possible.
We successfully sold the business to a USA-based lifestyle brand company and ensured 25 stores remained open in Australia, along with 256 full-time, part-time, and casual staff remaining employed.
First ranking secured creditors received distributions of circa 21 cents in the dollar. The sale also allowed for the immediate payment of outstanding employee entitlements of approximately $1.1m in full.