KMD to divest SE Asia facility and phase down operations

Outdoor goods retail company KMD Brands is divesting its Southeast Asia manufacturing facility and will phase down operations over the next 12 months as it looks to improve its capital position.

The NZX and ASX-listed owner of Kathmandu, Rip Curl and Oboz footwear said the divestment was expected to unlock working capital of about $6 million.

The net proceeds of property was expected to be between $5m and $7m, and used to further strengthen the group’s balance sheet, after it reported a first half net loss of $13.1m earlier this year.

Trading update

Kathmandu sales continued to improve in the fourth quarter (Q4) ending July, led by a strong performance in the rainwear, fleece and base layer categories, with New Zealand outperforming Australia.

Full year underlying group profit was expected to be in the range of $38m to $41m for the year ending July, which compared with $17.7m the year earlier.

Total full year group sales were expected to be in a range of $1.04b to $1.044b, which compared with 2025’s $989m.

Kathmandu’s same store sales, including online, were up 4.8 percent for the first full 24 weeks of the second half, though Rip Curl’s sales were 2.8 percent down on the year earlier.

However, it said the winter sale period had seen weaker consumer demand associated with unseasonably warm weather on the east coast of Australia.

On the plus side, it said Oboz sales had returned to growth in Q4, as anticipated, driven by continued strong online performance and flow of new product launches.

The group’s net debt was expected to be in the range of $63m to $66m at the end of July, which compared with $52.8m in the year earlier.

It said the increased debt was a result of a change in the timing of some supplier payments, as well as increased investment in working capital and inventory ahead of potential supply chain disruptions, as well as a weaker NZ dollar.