Kika closes store in Netanya as workers rally to demand wages

Austrian furniture giant Kika closed its doors in Netanya on Thursday morning, one day after the store’s bank assets were frozen and employees were not paid on time.

Hundreds of employees gathered in the parking lot outside the store on Thursday morning demanding their wages for the month of April as well as formal dismissal notices.

Kika opened its doors in Israel in September 2011 and generated NIS 27 million in revenue through the end of 2011. Nevertheless, the company posted losses of nearly NIS 45 million in 2011 and NIS 13 million in 2010, according to Globes.

In early April, Globes reported that Kika Israel had debts totaling NIS 146 million, and Ashtrom Properties, which owns 15% of Kika Israel,  recorded the company as having zero value.

Iris Tayeb, assistant manager of the store, told the Ynet news website that the employees are demanding letters of dismissal and severance pay.  “People here have been left hanging…. Most of the employees, who have been here since the store first opened, earn a salary of NIS 4,000 – 5,000,” she said.

Tayeb added, “The employees here have poured their hearts into this store, and tomorrow they will be thrown out of their homes when their checks bounce and their mortgages cannot be paid.”

Tayeb said that on Wednesday she met with the CEO of the store, who promised that employees’ salaries would be deposited by 5 p.m. that day. He later acknowledged that salaries would not be paid.

“Ashtrom has no money to pay our salaries,” Tayeb said, “but the security guards that they brought [to keep the employees out of the store] — those they can pay.”