Leen Bakker’s 44 Belgian stores to be closed or sold

Home furnishings retailer Leen Bakker has been ordered by a court to close or sell its 44 stores in Belgium amid serious financial difficulties.

Dutch company Leen Bakker entered the Belgian market 40 years ago and employs 309 people in the country through 30 stores in Flanders and 14 in Wallonia.

If the struggling company cannot find a buyer by early December, bankruptcy is likely.

But with a deficit of €1.2 million in 2023 that rose to €5.7 million last year, and current debts amounting to more than €20 million, a buyer seems unlikely.

Leen Bakker follows Casa and Blokker as the latest home decor retailer that has had to close its doors in the face of increasingly fierce competition.

“That's the first factor that explains this decline – whether it's competition from low-cost stores, such as Action, or online platforms such as Temu,” said Ingrid Poncin, professor of marketing at UCLouvain.

“Secondly, the decline in purchasing power has led to a decrease in impulse purchases, such as those found in these home decor stores.

"And finally, we mustn't forget the increase in operating costs for all these stores in terms of salaries, energy and storage costs.

"Leen Bakker's products are mid-range and of higher quality than those sold by online platforms or discount stores. So it's impossible to compete with retailers whose prices are so low."

Poncin said that the difficulties encountered by Leen Bakker, and before that by Casa and Blokker, are similar to what happened in the textile and fashion industries a few months ago with brands such as Pimkie, Camaïeu and Esprit - “mid-range brands that are unable to differentiate themselves from the competition of the internet and groups whose sole focus is price rather than quality.”

Unions were somewhat surprised by the court-ordered shutdown, however. Leen Bakker Belgium had been undergoing judicial reorganisation for several months in order to protect itself from its creditors and seek new opportunities for development, which made the forced sale of the stores unexpected.

“It would seem that this is linked to the fact that the main creditor, which is the Dutch group, fears that if the situation deteriorates in Belgium, it will spread to the Netherlands and Dutch stores will also start to experience difficulties,” said Myriam Djegham, national secretary of the CNE union.

“One might also wonder why the Dutch management has not taken any measures or made any plans to modernise its shops and products in an attempt to turn the situation around in the face of competition.”

Of the 44 Leen Bakker stores in Belgium, more than two-thirds are loss-making.

A buyer could still come forward to acquire the profitable stores, but for the others, bankruptcy will most likely be the only outcome.

Photo: Donald Trung/Wikimedia. Licensed under Creative Commons