Kitchen designer and manufacturer collapses with 200 jobs at risk

National kitchen designer and manufacturer Australian Kitchen Industries has gone into voluntary administration, a victim of tough economic conditions for manufacturers and last year’s floods in Queensland.

The company has 20 stores across the nation, which operate under the brands Kitchen Connection, Wallspan Kitchen Connections and Impala Kitchen Connection, and it employs around 200 staff.

There are stores in Melbourne, Sydney, Adelaide and Brisbane, although Impala Kitchens in states other than Victoria is not part of the AKI group and is not affected by the administration.

Todd Gammel, director in the business recovery division at HLB Mann Judd, told SmartCompany there were a “number of factors at play” leading to the collapse of the company.

“There was a downturn in trade from the general economic conditions, warehouses were massively affected by the floods particularly in Queensland and it needs a restructure,” he says.

“In this scenario there are obviously some people who are put out and we are trying as best as we can to resolve things, but we have the voluntary administration process which makes things more difficult.”

Gammel says HLB Mann Judd is continuing to trade AKI with a view to selling and has placed an advertisement in the newspaper today.

He says HLB Mann Judd was holding discussions with “a number of interested parties”.

AKI is manufacturing and delivering kitchens to customers on a daily basis and, as part of the administration process, all new customer deposits are held in an account under the control of the administrator and are applied to the customer’s kitchen order, which will be manufactured and installed as per the contract.

Barry Taylor, head of the business recovery and insolvency team at HLB Mann Judd, said the administrator is currently negotiating with key suppliers to ensure that supply will continue as usual and kitchens can be completed.

“The business is committed to meeting its responsibilities to customers and is operating as normal, with all staff having been reimbursed as usual,” he said.

However AKI customers are concerned they will be left empty-handed, with many taking to Whirlpool internet forums to raise concerns about long delays and difficulties they have experienced with their renovation projects.

Forum user “Nusa” says she is in the process of getting her kitchen renovated by AKI but work has stopped on the kitchen.

“I have already been without a kitchen for a week. They still need to fix hinges, straighten doors, etc. and I still do not have a kitchen,” she says.

“The electrician has disappeared and left holes in floor and wall. He is not answering his phone.”

This latest company collapse comes as ASIC reported that it has recorded the second-highest number of insolvencies on record for May.