French fashion group IKKS, known for its popular brands IKKS, One Step, and I.code, is facing significant challenges in the current market. In response, the company is considering a downsizing strategy to counter the effects of the “unprecedented disruption” it has experienced. The company presented a recovery plan, named “PhoenIKKS,” to employee representatives on February 5th, which includes the potential elimination of 202 jobs in France out of a total of 1,328 employees.
IKKS, which was acquired by US investment funds Avenue Capital, Carval Investors, and Marathon Asset Management in 2019, is also planning to close 77 retail outlets out of the 604 currently in operation in France. The restructuring plan aims to refocus the brand strategically on its most profitable ready-to-wear activities and adjust its geographical footprint.
The need for downsizing is attributed to various factors, including the adverse impacts of the pandemic, the closure of some factories due to the invasion of Ukraine, and rising inflation. In response to these challenges, IKKS is determined to react vigorously and develop resilience strategies for its long-term survival.
While the impact on subsidiaries outside of France has not been confirmed yet, it remains to be seen if any brands or product categories will be discontinued. IKKS is renowned for its urban contemporary and slightly mischievous style collections for men, women, and children. France is the brand’s primary market, followed by Spain and Belgium. The group also includes two smaller sister brands: One Step, which was acquired in 2015 from the Zannier group, and I.Code, created in-house in 2005 to target younger consumers.
Established in 1987, the IKKS group currently operates 700 stores worldwide and employs a total of 1,700 individuals. Prior to the pandemic, the group reported a revenue of €329 million in fiscal year 2019, a figure that has not been reached since then. To combat this decline, CEO Ludovic Manzon and his team implemented a plan in 2020 that focused on product development, advertising, and attracting younger customers, with the goal of boosting revenue and profitability by 2025.
The group has also faced departures in recent years, with deputy managing director Valerie Dassier and head of finance and technology Jean-Philippe Bou both leaving to join French brand Aigle in 2022. Despite efforts to develop standout products and expand its offerings, IKKS, like many ready-to-wear retailers, has been impacted by the conflicts in Ukraine and the Middle East, as well as rising inflation. These factors have significantly affected customers’ spending power, particularly in mid-sized French towns.