By  on January 16, 2018

Kiko Milano has the go-ahead to begin closing most of it U.S. store base, but the beauty brand said its robust international retail presence will remain intact.The American arm of the Italian beauty brand filed for bankruptcy in Delaware late last week, with plans to close nearly all of its 29 retail locations here, but Kiko stressed that the move does not reflect any financial issues outside of the U.S., nor any kind of a shut down.“This procedure is part of Kiko’s global reorganization plan, with the purpose of strengthening the brand worldwide, through a number of measures included in the company’s new three-year business plan,” a spokeswoman for Kiko said. Kiko is owned by Milan's Percassi Group.The reorganization is marked by a “redefinition” of Kiko’s retail footprint, including closures in the U.S. but an increase in stores “where the cosmetic industry is experiencing high rates of development,” the spokeswoman added. E-commerce will also be a stronger focus of the brand and Kiko’s U.S. web site will continue, as will the official sale of its goods through Amazon, which began a few months ago.Kiko operates about 1,000 stores in 21 countries, including its largest flagship in Milan, and its wide range of midprice products are available online in 33 countries. The spokeswoman also noted that Kiko’s overall revenue for 2017 came in at 610 million euros, an increase of 3 percent for the year.In a filing with the bankruptcy court, Frank Furlan, chief executive officer of Kiko USA, said store closings in the U.S. were to begin immediately and the company retained Tiger Capital Group and Asset Recovery Advisors to complete the closings by the end of February. Five U.S. Kiko stores are expected to remain, in major tourist areas in New York, Miami, Los Angeles and Las Vegas. In a filing with the bankruptcy court, Frank Furlan, chief executive officer of Kiko USA, said store closings in the U.S. were to begin immediately and the company retained Tiger Capital Group and Asset Recovery Advisors to complete the closings by the end of February. Five U.S. Kiko stores are expected to remain, in major tourist areas in New York, Miami, Los Angeles and Las Vegas.“While the goal of a fun and unique customer experience has always been foremost at Kiko, unpredictable industry-wide market challenges in bricks-and-mortar retail locations (notably, declining traffic in traditional shopping malls and certain street locations and the inability/lack of willingness by landlords to adjust rents to these operating realities) have led to extremely high operating costs and continually depressed profits in recent years,” Furlan said.Furlan, who joined Kiko in June from Perfumania, which filed bankruptcy last year but quickly emerged as a private entity, said Kiko is still looking for strategic retail opportunities and will begin selling “with a third-party bricks-and-mortar retailer that can complement the brand positioning of its own Kiko retail stores.”Shortly after Furlan came to Kiko, he attempted to negotiate lower rents or early terminations for all of Kiko’s U.S. retail leases, but only one landlord agreed. With the bankruptcy, the brand expects to save $7.1 million in annual operating costs.The brand is also closing its New York headquarters, and moving its 17 remaining corporate employees from a 10,000-square-foot office to a temporary location while it looks for a smaller space.For More, See:Shiseido Targets Japanese High School Students With New BrandBebe Joins B. Riley Through Debt ConversionMall-Based Retailer A’Gaci Files for Bankruptcy

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