The bankruptcy of Kika/Leiner could have serious consequences for the domestic furniture trade. Many questions remain open and the consequences are currently difficult to assess, says Vienna-based trade expert Andreas Kreutzer. However, if the company continues to shrink or even disappears from the market completely, that would be “bad because it further concentrates the market in Austria,” says Kreutzer. Further exploitation of the sites is also likely to be difficult.
As to what will actually happen to the furniture store – whether another reorganization will be implemented or whether an investor will perhaps be sought – “we cannot say much about that at the moment,” says Kreutzer, who is also the director of Kreutzer, Fischer and Partner (KFP). However, from his point of view, it makes little sense to downsize Kika/Leiner again and close markets and then keep only a few open.
Competition could come in
In principle, it is possible that a competitor will take over the company. However, there is little competition on the Austrian market. The XXXLutz Group can only enter where the market concentration is not yet too great. He considers Ikea’s entry unlikely. “Otherwise we will no longer have large-scale providers.”
The question therefore arises as to what should be done next with the locations. “It will be difficult to operate the locations.” They would not be a good option for hardware stores or electronics stores, as the locations tend to have multiple floors and are less favorable in these areas. In general, stationary retail is not having an easy time at the moment. “The time for large stationary areas is actually over,” says Kreutzer. Internet commerce in particular cannibalizes the concept.
Suppliers are unlikely to be affected much
The expert is less concerned about subsequent bankruptcies among Kika/Leiner’s suppliers. After the company’s initial contraction last year, in which more than half of the branches were closed, the furniture store was no longer as big a customer for private label manufacturers as it used to be. Although the suppliers could certainly make demands on Kika/Leiner, this should not pose a threat to their survival.
Last year, Kika/Leiner ranked third in the industry in terms of turnover. According to Kreutzer, the market leader in 2023 was the XXXLutz Group with a turnover of around 1.5 billion euros, followed by Ikea with around 900 million euros. Kika/Leiner achieved a turnover of 600 million euros; the expectation for this year would have been around 300 million euros.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
