Kika Israel is being liquidated, just eight months after its celebratory opening. The Central District Court yesterday accepted the company's petition to move from a stay of proceedings in the hope of recovery, to liquidation. 170 of the furniture and housewares store's 250 employees will be fired within days.
Central District Court Judge Ilan Shilo said, "There is no choice but to accept the trustee's petition and order the termination of the stay of proceedings in a way that the process will continue as part of a liquidation file."
The ruling was in response to the filing by the trustees, "We reached the unequivocal decision that the company cannot repay its NIS 170 million in debts, and there is no chance of a potential buyer acquiring such a company with its huge losses and small assets-to-debt ratio."
Judge Shilo appointed Kika Israel's trustees as temporary liquidators and accepted their request to fire most of the company's employees and implement their operating and inventory liquidation plan within five weeks. The store will hold a liquidation sale, offering its remaining inventory at 30-50% off.
The Israeli franchisees of the Austrian retailer - Batito Solomon and Ashtrom Properties Ltd. (TASE:ASPR) - opened a store in Netanya in September 2011, and shut it down two weeks ago. Solomon and Ashtrom promised Kika to open a second store by the end of 2012, and four more stores by the end of 2014, including a store in Jordan in 2013.
Published by Globes [online], Israel business news - www.globes-online.com - on May 23, 2012
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