Strong online sales growth have enabled New Zealand based outdoor and adventure wear retailer Kathmandu to lift its first half year profit by 6.4% to NZ $10 million, and will help it expand further globally.
Kathmandu have announced a net profit after tax of NZ$10 million for the six months ended 31 January 2017, an increase of 6.4 percent compared with the same period last year.
Online sales saw strong growth, which the company says was assisted by the launch of a responsive website in November 2016, which delivers a better customer experience as it integrates product and content. “Overall, we achieved over 18% online sales growth, resulting in online sales reaching 7.4% of total sales,” it said in its HY17 financial statement.
Overall sales grew in Australia and New Zealand, with strong same store sales growth in Australia, Kathmandu’s largest market. UK sales on the other hand declined with the closure of three stores last year.
“The results for the first half of FY2017 were overall in line with our expectations” said Xavier Simonet Kathmandu’s chief executive. “We have had a solid start to FY17, but as always the success of our full year result will hinge on key sale periods that fall in the second half.”
Simonet says that Kathmandu has had to minimise the impact of currency on our gross margin through sourcing negotiations, product newness, price action, improved stock management and cost control. “Maintaining gross margin and operating efficiency will continue to be a key focus. We will continue to deliver great value to our customers through the benefits of our refreshed Summit Club loyalty programme, and by designing innovative, distinctive and sustainable quality products.”
Off the back of its strong sales growth, and online in particular, Kathmandu will focus more on international sales growth over the next few years. The company is currently in negotiations with larger retailers in Germany and other parts of Europe to capture on its vision of global expansion, and grow its offshore brand presence through online retail and digital marketing, according to Simonet.
“The Australasian business provides the foundation for our brand to expand internationally. As we look forward past FY17, I am excited about the progress we are making towards securing new international wholesale relationships.”
“Strengthening the distinctiveness of our brand will also open up opportunities to be relevant in international markets, as well as on social, digital and online channels,” said Simonet.
“We remain committed to offering great, innovative, distinctive and sustainable quality products to our customers and providing a seamless shopping experience whether in-store or online.”
The majority of Kathmandu’s annual sales are derived from three major sales promotions each year, occurring in a portion of the months of December and January (Christmas), March and April (Autumn) and June and July (Winter). Two of these sales occur in the second half of the financial year, and the winter sale is the largest of these three promotions. As a consequence, a greater proportion of Kathmandu’s sales and EBITDA are derived in the second half of each financial year, with the proportion in any given year dependent on the relative success of each of these promotions.
Kathmandu Holdings and its subsidiaries is a designer, marketer and retailer of clothing and equipment for travel and adventure. It has a strong online presence with its outdoor and camping webstore, customers can shop online and choose from its wide range of outdoor and adventure supplies, including clothing and equipment. Established in 1937, Kathmandu also operates over 130 store in its New Zealand base, Australia and the United Kingdom.