Leeds Group to close German subsidiary KMR
Leeds Group is to close its loss-making Stoff-Ideen-KMR subsidiary in Germany. The UK-based fabrics and haberdashery wholesaler/retailer cited the conflict in Ukraine together with continuing uncertainty in global markets for “deepening” the impact on the German economy and affecting consumer confidence.
The situation was exacerbated by the Covid-19 woes continuing to affect its markets in the early part of this year where Germany and European counterparts continued to introduce restrictions to curb the spread of the Omicron variant “which directly impact retail operations”.
Leeds Group said the closure of the retail arm will allow it to concentrate on its larger wholesale operations, German sister brand Hemmers-Itex Textil Import Export.
“Local management have reviewed the options available to both its trading companies… to ensure the company is able to meet its ongoing challenges”, it said Monday.
The company added: “KMR has continued to make losses in the current financial year and, following an independent review, Hemmers management have decided that the KMR business is unsustainable and has today placed KMR into an insolvency process. During this process, the insolvency administrator will control and operate KMR to realise its assets in order to pay any outstanding creditors”.
It added: “The Hemmers management and Leeds Group directors are committed to ensuring that Hemmers returns to profitability and confirm that sales for the current year are in line with their expectations”.
For the year ended 31 May 2021, audited revenue for KMR accounted for £5.34 million, or around 16% of the company's overall revenue, while Hemmers revenue accounted for £27.67 million, or 84% of its overall revenue in the same year.
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