Kathmandu profit up but sales in New Zealand trail Australia's

Tuesday, 26 September 2017

Kathmandu sales were up 3.6 per cent on last year but were almost half that of Australia's 7 per cent rise.

Retailer Kathmandu will continue to expand into Europe and will branch into China to tap into the Asian market.

The company has posted a profit of $38 million for the year to July 31, up 13.5 per cent on last year.

Kathmandu chief executive Xavier Simonet says the company wants to tackle the Chinese market and will launch an online store in a few months.

Kathmandu chief executive Xavier Simonet said the expansion into Europe had started and China was next on the cards.

Kathmandu gear was being trialled at Go Outdoors in the United Kingdom and Sportscheck in Germany.

First Retail managing director Chris Wilkinson says Kathmandu are working in a crowded market.

JustOne retail marketing consultant Ben Goodale says Kathmandu's Summit Club is an opportunity that hadn't been looked into yet.

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Total sales in New Zealand stores were worth $147 million, compared with $298m in Australia.

A new global website kathmanduoutdoor.com had just been launched and the Chinese website Timor Global would go live in the next few months.

The global website would not offer the Summit Club promotional model Kathmandu offers in New Zealand and Australia.

Simonet said he had 'no idea' what the Chinese and global website would do for sales.

'We've never done it before so it's an entrepreneurial approach. We're just going to see how it goes,' he said.

Simonet said there was big potential in China demonstrated by the number of Chinese shoppers in Australian and New Zealand stores.

Despite extreme rainfall and cold weather recorded across the country this winter, same store sales in New Zealand grew by only 3.6 per cent, compared to 7 per cent in Australia.

Online sales made up 7.5 per cent of the total.

Simonet said the company had changed its store layouts and had a distinctive story.

'We are a brand born in the mountains of New Zealand. Adventure travel is out unique point of difference,' he said.

First Retail managing director Chris Wilkinson said the outdoor clothing space was crowded.

'Homegrown brands [are] on the rise. Cactus, Swazi, Earth Sea Sky, Alchemy Equipment and others are developing niches for serious active consumers,' he said.

'Macpac have continued to grow and in many ways have captured those consumers that treasured original New Zealand brands.

'Kathmandu no longer have that to themselves. We only need to look at Mountain Designs' total retreat from the New Zealand market a few years ago to understand the future market trends they saw ahead.'

JustOne retail analyst Ben Goodale said since Briscoe Group failed its takeover bid for the company in 2015, it had focused on product development and brand integrity.

'Their products are good, but not unduly expensive, and their store environments are clean and well merchandised.

'I wouldn't change too much, they seem to be balancing range, price and brand about right. It's not seeming too premium but the products still feel pretty good when you are in store.

'They probably need to consider focusing some of their marketing into key niches to grow some segments.'