The "Low-Cost Fashion" Specialist Kiabi Falls Victim to Large-Scale Fraud
The clothing retailer Kiabi confirmed on Friday that it had fallen victim to a "large-scale sophisticated financial fraud," which it says does not "in any way undermine" its "stability," following media reports of a €100 million embezzlement.
A staggering amount: according to Franceinfo, €100 million has "vanished" from Kiabi's accounts. The company, founded in 1978 in northern France, is part of the Mulliez group.
Franceinfo reported on Friday morning that a former treasurer of the low-cost clothing brand was arrested in August by the judicial police after disembarking from a private jet at Figari airport in southern Corsica.
This 39-year-old woman, who had been living in Florida while working in the luxury sector, has been charged with "fraud and money laundering as part of an organized group," according to the media.
"The treasurer was indicted by the investigating judge and placed in provisional detention on August 18, 2024," the Paris prosecutor’s office told AFP on Friday.
According to Franceinfo, Kiabi tried to recover an investment made a year earlier in mid-July, but when the company contacted the bank, the money had "vanished" through a method known as "bounce accounts."
The retailer’s management said on Friday to AFP that in July, it discovered it had been the victim of a "large-scale sophisticated financial fraud," without confirming or denying the amount embezzled.
"We immediately initiated all necessary actions, including legal proceedings, to recover the amount lost to the fraud. We have full confidence in the outcome of the actions taken by the judicial and police authorities involved," the management added.
"Business Continuity"
The same source assured that "this fraud in no way undermines Kiabi's financial stability and has no impact on the company's ability to meet its annual targets."
On the employee side, "we were informed of the fraud yesterday (Thursday), but we learned the details from the press this (Friday) morning," said Muriel Voldrich, central CGT delegate and elected member of the CSE, to AFP. Questions will be raised with management on the matter.
This well-known retail chain, which operates through a network of more than 600 stores in 28 countries, achieved €2.2 billion in revenue in 2023.
Approximately 10,000 people work for the company worldwide, including around 6,000 in France.
Kiabi, which claims to have sold 293 million items to 22.3 million customers in 2023, is part of the Mulliez family group, which includes nearly 50 brands through various holdings (Auchan, Decathlon, Leroy Merlin, Saint Maclou, Jules, Pizza Paï, Electro Depot, etc.).
It is one of the few brands to perform well in a sector, ready-to-wear, that has been shaken by a severe crisis.
This crisis has been fatal for some brands, leading to liquidations, such as Camaïeu in September 2022, which resulted in the layoff of 2,100 employees, a move that left a lasting impression, or more recently, San Marina, Burton of London, and Esprit.
Many other brands have undergone judicial restructuring, buyouts, or protection procedures, including Pimkie, Kookaï, and Naf Naf.
These brands have suffered from a combination of factors: the pandemic, inflation, rising energy and raw material costs, rent and wage hikes, and competition from second-hand stores and fast-fashion retailers.
Source: AFP, September 27, 2024.
Comments
Post a Comment