Will Hoplop and Leo’s Leikkimaa close? Huge debts in the background – 2024-09-10 04:03:14

Leos Hoplop Oy has 22 indoor playgrounds in Finland. The company says that it has now started a savings program, which may also mean closing the parks. Photo of Suomenoja’s HopLop park in Espoo. Antti Nikkanen

Leos Hoplop Oy, which applied for corporate restructuring last week, has a debt of over 8 million euros. In addition, the company has made a loss of more than 1.2 million euros since the beginning of the year. The information can be found in the business reorganization application submitted to the district court of Länsi-Uusimaa on Thursday. The company is applying for restructuring itself, but has received approval from its largest creditors. According to the company, if instead of restructuring the company ended up in bankruptcy, the losses for creditors and also for consumers who bought gift cards would be big.

The biggest creditors of Leos Hoplop Oy are the company’s Swedish parent company, Nordea bank, and SPI Global Play AB, which is a large manufacturer of indoor playgrounds. According to the application, Nordea and the bank’s financing company Leos Hoplop owe more than 1.9 million euros. The parent company owes more than 3.8 million euros to Sweden.

The company runs a total of twenty-two Hoplop and Leo’s Leikkimaa indoor playgrounds in nineteen locations in Finland. Leos HopLop has a total of 426 employees in Finland, most of whom work on an hourly contract.

In the reorganization application, the company justifies its weak financial situation with the strong inflation that followed after the war of aggression started by Russia in 2022, which has been reflected especially in rents. According to the company, most of the lease agreements for indoor playgrounds are tied to the cost of living index, which has been affected by inflation and has increased rents sharply.

– In addition to this, costs have also increased in other goods and services purchased by the company. In particular, cost pressures have been caused by the significantly increased price of electricity and heating energy. These costs have not been able to be transferred to the entrance fees and restaurant prices charged from customers, because the purchasing power of customers has also weakened, the application lists.

Reductions ahead?

According to the financial situation described in the renovation application, the indoor playgrounds have suffered a heavy loss this year, which has already accumulated 1.2 million euros. Last year, the company announced that it recorded a meager 5,000 euros in profit with a turnover of just over 23 million euros, but the company’s cash resources have thus dropped considerably. In 2022, according to Kauppalehti’s analysis, indoor playgrounds generated a loss of just under 1.4 million euros with a turnover of around 20 million euros.

Leo’s Leikkimaat, which originated in Sweden, and Hoplopit, which started in Finland in 2006, merged in January 2023, when Litorina IV, the main owner of Leo’s Leikkimaat, and the CapMan Special Situations I fund, which owned Hoplopit, agreed on a new ownership arrangement, in which both continued as owners. Hoplops was also connected with Leo’s Leikkimaiden in the same chain, which was said to be the largest indoor playground company in Europe.

Now, in the restructuring application, it is said that the “implementation of the merger and full achievement of the synergy benefits” is still in progress.

According to the application, a savings program has been started at the playground company, where savings are sought, among other things, by “critically examining the administration and organization”. In addition, IT systems and restaurant offerings are “aimed at harmonizing”. The company also aims to reduce the use of external service providers.

The restructuring application also mentions the closure of unprofitable playgrounds, as the company now intends to “examine the extent and unit-specific profitability of its indoor playground network”.

In addition to Finland, the group already started a savings program in its Swedish companies in the summer. Leos Hoplop states in the application that the group’s financing is managed centrally through the Swedish parent company, and because of this, the restructuring decisions made in Sweden also affect the Finnish company’s financial position.

Lots of customer money

– All parks are open as before. We review all our leases and operating costs during the renovation. If there are any changes to our parks, we will get back to it after we have finalized the agreements with our landlords, Leos Hoplop’s Marketing Director Gabriel Bergqvist responded to Iltalehti’s survey on the situation of playgrounds on Friday.

On Friday, Iltalehti reached out to several managers of Leos Hoplop by phone, but only an email inquiry was answered in the end.

Bergqvist did not directly answer the question whether the renovation will affect ticket prices. He said that the company adjusts ticket prices regularly just like any other company focused on consumer sales.

However, Bergqvist did not deny that the restructuring would cause personnel reductions. However, according to him, the reductions will not affect the safety of customers, which is a priority in the company.

The Finnish Competition and Consumer Authority (KKV) told Iltalehte on Friday that customers of Hoplop and Leo’s Leikkimaa should follow the announcement of the company that applied for corporate restructuring. In the restructuring procedure, the means of the Consumer Protection Act to secure customer payments are limited.

According to Leos Hoplop, the restructuring will not cause any changes to the use of already purchased gift and season cards, as well as series tickets. According to the restructuring application, gift cards and annual passes worth around 850,000 euros have been purchased at the moment.