The textile discounter KiK is facing profound changes. According to media reports, up to 400 of its approximately 2,400 stores in Germany could be closed. A development that is not only significant for employees but also signals the transformation of German retail.
Patrick Zahn has been the managing director of KiK since 2016. According to his own statement, he has left the firm “of his own volition” owing to strategic differences with owner Tengelmann.
At the same time, it was revealed that the business intends to shut up to 400 outlets. KiK refers to “continuous adjustments” in which underperforming areas are examined.
Although the corporation has not offered particular data, persistent media reports indicate that one out of every six locations in Germany may be affected.
The corporation employs around 32,000 workers throughout Europe. It’s unknown how many jobs are at jeopardy as a result of the proposed closures. KiK aims to continue hiring affected personnel in other locations whenever feasible.
Is KiK in crisis?
The plan to audit so many establishments raises concerns. While KiK emphasises that this is a regular business action, the timing, along with the CEO’s unexpected resignation, shows that there are broader structural issues.
This might be due to increased competitive pressure in the cheap textile sector, changes in customer behaviour, or growing operational expenses.
Furthermore, internet purchasing is increasing the pressure on brick-and-mortar stores. KiK intends to invest in current stores and install a modern store concept by 2028, although it is unclear if this would be sufficient to stop the trend.
German retail under pressure
The situation at KiK is not an isolated case. The entire retail sector in Germany is facing major challenges. The German Retail Association (HDE) expects nominal sales growth of only around 2% for 2025. At the same time, the association predicts that around 4,500 stores will close permanently this year.
Brick-and-mortar retailers are particularly hard hit. While the business situation is often still rated as “satisfactory”, many retailers anticipate declining sales. Energy prices, staff shortages, and declining customer traffic are putting pressure on businesses.
Meanwhile, online retail continues to grow: by 2024, its share of total retail sales already exceeded 13%, and the trend is rising.
The development at KiK and the situation in the retail sector demonstrate how important it is to regularly review one’s own business model. This offers five key insights for the self-employed:
Consistently assess profitability: Unprofitable locations or services can become a burden in the long run. Taking countermeasures early on will ensure your ability to act.
Allow flexibility: Sometimes it is better to give up part of the business in order to focus resources on areas that are working.
Clearly align strategies: As the KiK case demonstrates, disagreements in leadership can have serious consequences. Entrepreneurs should ensure they are on the same page with partners, shareholders , or investors.
Modernize and invest: Standing still is rarely an option. Those who invest in their business model—be it through digitalisation, customer loyalty, or new sales channels—remain competitive.
Expand your online presence: The trend is clear. Even small retailers should have a strong digital presence – whether through social media, an online store, or local platforms.
The proposed layoffs at KiK are a hint that brick-and-mortar retail is undergoing significant transformation. Entrepreneurs and the self-employed must be more adaptable, evaluate their own offerings, and continually position themselves for the future.
