Kathmandu Flags Further Overseas Expansion

By Rory Betteridge | 23 Sep 2014

Kathmandu isn’t fazed by slipping profits, citing high sales figures in its case for expansion into Europe.

A slipping Australian dollar and a slow sales period don’t seem to be daunting Kathmandu, which is proceeding with planned expansions into the United Kingdom and greater Europe.

Fairfax reports that the New Zealand brand is looking to invest NZ$5 million into its British outlets, as well as an expansion into mainland Europe.

Despite a demand slump over the key winter selling period and the sluggish dollar combining to produce a profit fall of 4.6 percent for the outdoor and active clothing retailer, Kathmandu points at a 6.9 increase in Australian sales and a worldwide sales increase of 2.3 percent as positives to draw from the past quarter. The brand declared a $0.09 dividend, bringing the full-year payout to $0.12, level with last year’s dividend.

Kathmandu COO Mark Todd claims the result is good, considering June’s slower than predicted business and an unfavourable exchange rate, which cut nearly NZ$6 million from its bottom line. Taking the exchange rate out of the equation, sales in Australia have grown promisingly by nearly 15 percent, as well as in New Zealand by 2.9 percent. Roughly five percent of total sales have been attributed to Kathmandu’s online retail channel. Business Insider reports that Kathmandu has enjoyed year-on-year sales increases since 2009, and expect the trend to continue.

“Given this strong position and the scale of our business, now is the right time to begin taking Kathmandu to the world,” Todd told Ragtrader. “We are excited to be beginning a new stage in Kathmandu’s development.”

Todd is heavily tipped to take over from Peter Halkett as CEO for Kathmandu, who announced plans to step down last month. While the company may appoint another to the post, Todd’s performance as acting CEO has been received well.

Kathmandu had warned investors of a quieter-than-normal winter (which has been unseasonably warm and dry) back in June, the news triggering a 12 percent share price drop.

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