* Kika/Leiner says secured money for up to two years
* Plans to invest in logistics, online presence
* To review stores for efficiency
* Says will be able to pay outstanding bills this week (Details, more quotes from Kika/Leiner chief, background)
By Kirsti Knolle
VIENNA, Jan 29 (Reuters) - Austrian furniture retailer Kika/Leiner said it has secured enough cash to see it through this year and plans to invest in logistics and online services, a positive step in its owner Steinhoff’s efforts to overcome deep financial troubles.
South Africa’s Steinhoff, which owns more than 40 brands including Poundland in Britain, revealed accounting irregularities last month, sparking an 85 percent share price fall that wiped more than $10 billion off its market value.
It has since been scrambling to sell assets and find short-term funds to avoid parts of its business pulling down the sprawling retail empire.
Steinhoff said last week it had largely addressed short-term liquidity requirements and that Kika/Leiner, which had faced the biggest problem, as well as Poundland, France’s Conforama and U.S. group Mattress had secured new money.
Kika/Leiner, with annual sales of around one billion euros in its home market and eastern Europe, sold its flagship store in central Vienna in December to pay its staff of around 5,500.
“We intensively negotiated with our parent company in South Africa in the past weeks,” Managing Director Gunnar George said at a news conference in Vienna. “We found a solution that secures us liquidity for the next 12 to 24 months.”
The first batch of money will be available this week and enable Kika/Leiner to pay all outstanding bills and fund core growth projects, George said.
He did not specify an amount, but said annual wage costs were around 200 million euros and planned investments this year were 50-60 million euros.
A large portion of Steinhoff’s debt is attached to Steinhoff Europe AG, which also operates as an umbrella for Kika/Leiner.
The debt includes around 2.6 billion euros of syndicated bank loans, 550 million euros of bilateral loans and a 800 million eurobond, sources said.
Steinhoff is negotiating with shareholders and creditors to stabilise the group and sold a stake in investment firm PSG Group for around $600 million as part of these efforts.
Asked about the possibility it could also sell Kika/Leiner, George said: “One never knows... but... as furniture trade is Steinhoff’s core business, I would think they do not plan to sell us.”
The Austrian group’s operating business was profitable last year, but did not generate enough money to finance its growth plans without the South African parent, he said.
“The Kika/Leiner brand is worth something, I am not worried about it,” George, who became managing director in 2015, said.
Kika/Leiner has a market share of around 20 percent in Austria with Kika catering for young people with a broad range of modern, trendy furniture and Leiner a more upmarket brand.
The group lags competitors with its online presence and has recently hired a new manager to catch up, George said, adding it will undertake a review of all stores and could close some.
Improving logistics to deliver furniture faster and assemble it quicker is another top priority, while George said it could do more to reduce the number of suppliers for its 50 stores after cutting them back to around 1,100 from 1,800 in 12 months.
George said he saw growth potential for its small eastern European business, but did not elaborate on his plans. ($1 = 0.8054 euros) (Reporting by Kirsti Knolle; editing by Jason Neely/Jane Merriman/Alexander Smith)