Kathmandu owner KMD Brands’ vows turnaround after long-term share price plunge

Friday, 5 September 2025

The company behind Kathmandu is undergoing a restructure, including shutting 21 stores, as part of efforts to combat declining sales and a plunging share price.

KMD Brands, which owns and operates Kathmandu, Rip Curl and wholesale footwear brand Oboz, has seen more than 90% of its value wiped off its share price since its all-time high in 2014.

Since its post-Covid high in 2021, its share price is down 85%, and its stock price needs to gain 600% for investors to recover any investment put into the company at that time.

So far this year, KMD Brands’ share price is down 44%.

Shareholders appeared to approve of the turnaround plan, with the company’s share price gaining 16% by midday Friday to trade at 29c on the news.

The outdoor goods retailer which operates 300 stores globally is embarking on a new strategy it has deemed “Next Level” in a bid to find $25 million in cost savings and turn around its fortunes, according to a market update.

The company plans to shut 21 underperforming stores and review its store network as part of an organisational restructure. It has not specified which brands the closures would affect or in which markets, but it is widely believed to be Kathmandu stores.

A spokeswoman for KMD Brands said the final number of store closures was not yet confirmed, adding that the company was relocating some stores and opening new stores, including in Hawaii and on the Mediterranean coast.

Milford Asset Management equities analyst Jeremy Hutton said the Kathmandu brand was no longer profitable, although he said he believed there was still value in it.

“They used to report reasonably decent profits, but now they're going to report one year of zero profits, and then this year is going to be highly negative. They've got a long way to climb out,” said Hutton.

“The Kathmandu brand has been losing market share in the outdoor apparel space. Some of their key competitors like Macpac have been aggressive and seem to be winning share off Kathmandu.”

KMD Brands had been propped up by sales from the Rip Curl brand, he said.

Hutton put the company’s share price decline down to sales at Kathmandu declining, partly due to its hero product, the classic puffer jacket, becoming increasingly commonplace in a hyper competitive market.

“Investors are wondering will that continue, and can [the company] arrest the decline.”

At KMD Brands’ investor meeting on Thursday, it acknowledged the last few years had been tough for the company and advised there would be a big financial loss in their earnings this financial year.

The company said retail was being hit hard, and it was a tough environment for all businesses right now.

Group chief executive Brent Scrimshaw said: “The potential of our brands is far greater than what we’re delivering today.”

Most NZX-listed retail companies have seen their shares slide in recent months, and news of KMD Brands announcing it would close 21 stores comes following a tough week for bricks and mortar retail.

On Tuesday Smiths City placed itself into voluntary administration, after owner Colin Neal told The Post he had no choice but to downsize the business following a steep reduction in sales.

“The New Zealand retail market has been extremely difficult,” Hutton said.

“The Kathmandu brand is still the biggest in that outdoor apparel space in Australia and New Zealand, it still has a lot of sales, and it is a better diversified business with Rip Curl and Oboz attached to it. If we start to see some rebound in the Kathmandu brand, then I think the share price could potentially rebound strongly - but that's a big if still at this point.”

Retail commentator Chris Wilkinson said KMD Brands’ moves to restructure the business were necessary amid a challenging retail market, where it was hard to make a quick sale.

The cost of living crisis and high mortgage rates, coupled with job insecurity and down house values, had made the New Zealand shopper more frugal.

Wilkinson said the market that KMD Brands, and Kathmandu, operated in had become saturated, which would naturally see operators having to downsize their existing store networks as much-cheaper new market entrant Mountain Warehouse had been scaling up.

“KMD Brands is facing intense competition on their home front, and that's with Kathmandu, the mothership. What we've seen in recent years is the growth of Mountain Warehouse, the English mega retailer has doubled down on New Zealand with a lot more openings, and earlier this year, they've now opened in the Australian market.

“They've used New Zealand as the beach head into the Australasian market, they've established a very strong presence, including distribution centres and and that profile in the market. They are an exceptional retailer on a global scale because, whilst their predominant focus is on outdoor type clothing, they've got a much broader range within their stores, so they've got increased relevance than, for instance, a Kathmandu does.”

Mountain Warehouse has been experiencing 40% growth annually over the past few years, with more than 400 stores located throughout Britain, Europe, New Zealand and North America. The retailer employs 3500 staff.

Wilkinson said this and significant increased competition had proven hugely problematic for KMD Brands and Kathmandu, who were once the dominant player.

“I don't see it getting easier. We are getting to a point of saturation because, there are only a certain number of jackets and over-trousers and gloves that anyone actually needs. Brands like Icebreaker, have now started to pull back; they haven't grown their retail networks at all, and that’s a reflection of the fact that they've just got that saturation now.

“Brands will increasingly reduce their retail presence.”