Kathmandu and Rip Curl owner says discounting on the rise in retail
KMD Brands, which owns the Kathmandu outdoor clothing brand and surfwear business Rip Curl, says overall sales slipped by 6.4 per cent in August as households cut back on spending and warm weather reduced demand for puffer jackets.
Chief executive Michael Daly said across the retail market there were more signs of discounting and aggressive price promotions by rivals in a tougher market.
KMD Brands CEO Michael Daly. The group runs brands including Kathmandu outdoor clothing, Rip Curl surfwear, and Oboz shoes and boots.
“In those times, some consumers will look for deals,” he said.
The Kathmandu brand had borne the brunt of the slowdown in August compared with the same month a year ago, but Rip Curl and the United States boots brand Oboz both notched higher sales in August.
KMD on Wednesday announced a 0.6 per cent decline in net profit after tax to $NZ36.6 million ($33.7 million) for the 12 months ended July 31. Sales were up 12.6 per cent to a record $NZ1.1 billion and the company kept the final dividend steady at NZ3¢ per share.
Mr Daly said economic indicators in all the group’s major markets were pointing to a weaker economy, and that was playing out in both consumer behaviour, and a retail market where discounting was more prevalent.
“We’re definitely seeing a market that is quite aggressive on price,” Mr Daly said. “There’s general softness in consumer sentiment across the board now.”
KMD Brands shares slipped by 2 per cent to 75.5¢ in early trading on the ASX on Wednesday. The stock was at $1.06 in late May.
Rip Curl sales were up 8.3 per cent to $NZ582 million for the 12 months ended July 31. But earnings before interest and tax were down 9.2 per cent to $NZ44 million. Margins slipped to 7.6 per cent from 9.0
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