Make-up brand Kiko USA has filed a voluntary petition for relief under chapter 11
Kiko USA, the professional make-up and skin care brand, has filed for bankruptcy under chapter 11.
A subsidiary of Italy’s Kiko, which sells under the Kiko Milano brand, Kiko USA submitted the document for voluntary relief in the District of Delaware.
Kiko USA operates 28 retail locations in the US and one in Puerto Rico, and has already started to close some of its stores with plans to shutter 24 remaining underperforming locations by 28 February, 2018.
In a document filed by Kiko USA’s CEO Frank Furlan, he explained that retail sales had not “been sufficient” to cover costs, which primarily consist of rent and labour.
The company ran intro trouble due to the “general downturn in the retail industry” including a shift away from bricks-and-mortar retail to online channels.
Kiko USA faced a liquidity crisis by the end of autumn 2016, confronted with dwindling cash flows and sales projections “well under” historical numbers.
The company employs 244 members of staff, including 95 full-time employees. In the document, it noted: “As the Debtor [Kiko USA] implements right-sizing measures, including a physical store footprint, the Debtor believes a more efficient allocation of employees will present a significant opportunity for savings.”
Kiko USA has hired a Chief Restructuring Officer, Mark Samson, Managing Director of Metzler Henrich & Associates, to oversee its restructuring efforts “to help preserve and maximise value” for the benefit of the company and its shareholders.
The company has outlined a New Strategic Plan, which involves re-focusing on product assortment, realigning distribution focusing on five remaining retail locations, enhancing customer experience, optimising targeted marketing, implementing organisational changes, and growing the company’s e-commerce and Amazon Prime offering.