Kathmandu lifts first-half sales 12%, helped by new Rip Curl business

Friday, 12 February 2021

Kathmandu chief executive Xavier Simonet says the retailer is benefiting from its purchase of surf brand Rip Curl in 2019.

Retailer Kathmandu Holdings expects first-half revenue to lift by about 12 per cent as it benefits from higher sales from its new surf brand Rip Curl while international travel curbs hurt its Kathmandu outdoor travel and adventure sales.

Kathmandu, which also owns footwear company Oboz, paid $368 million for Rip Curl in October 2019, to diversify the group’s products, balancing Kathmandu’s winter and outdoor focus with Rip Curl’s summer and beach focus, as well as giving the group inroads into the North America and European markets where Kathmandu wants to expand.

Rip Curl achieved substantial sales growth in key global markets despite Covid-19 disruptions, with strong wholesale orders for the second half year, the company said.

The improvement in the first half “underlines the resilience of our group and validates the diversification strategy, launched through the successful acquisitions and integrations of Rip Curl and Oboz,” said chief executive Xavier Simonet.

* Kathmandu profit down $49m due to Covid-19

* Retailer Kathmandu cuts jobs as it prepares to reopen

* Kathmandu's Rip Curl stores locked down in Europe

* Rip Curl's wave will take Kathmandu into global waters (mind the sharks)

“Kathmandu enjoyed robust sales growth in camping categories, with renewed interest in local travel and adventure activities within Australia and New Zealand,” he said. “However, its performance was heavily impacted by low demand for insulation and rainwear resulting from the lack of international travellers to the Northern Hemisphere.”

Covid-19 disrupted trading during the half, with 60 stores in greater Melbourne closed for more than 11 weeks due to a lockdown, while 14 stores in Auckland were closed for more than two weeks, and trading in greater Sydney was affected over the Christmas period by an outbreak in the Northern Beaches.

Airport stores in Australia as well as Rip Curl stores in Hawaii, Bali and Europe were still impacted adversely by either Covid-19 related travel restrictions or Government mandated lockdowns and closures, the company said.

The retailer expects pre-tax profit of between $47m and $49m in the first half, excluding the impact of new accounting rules relating to leases. The profit forecast includes the benefit of government subsidies and cost savings, it said.

The company didn’t provide a comparable number for last year.

Kathmandu will release its full results for the first half on March 23, when it will announce whether it plans to resume dividend payments.

Shares in Kathmandu fell 1.5 per cent to $1.30 in mid-afternoon trading on Friday and have dropped 47 per cent over the past year.