Iconic surf brand Rip Curl takes chill off Kathmandu’s winter woes

Adventure clothing retailer Kathmandu is stoked by its purchase of iconic brand Rip Curl, saying more people took up surfing during the pandemic.

Store closure pain has been offset by online sales and the Rip Curl acquisition. Picture: David Mariuz/AAP

Adventure and outdoor clothing retailer Kathmandu took a hit from travel restrictions and store closures, but the “transformational” acquisition of surfwear brand Rip Curl has proved a wise move.

Ahead of its annual general meeting on Wednesday, Kathmandu issued a trading update showing direct to consumer sales for the 16 weeks ending November 15 had plunged more than 24 per cent.

The group’s 60 Greater Melbourne stores were closed for most of this period, while 14 Auckland stores were shuttered for more than a fortnight as restrictions returned amid a second wave of COVID-19 infections.

Airport stores in Australia as well as Rip Curl stores in Hawaii and Europe were still being hampered by either travel restrictions or lockdowns, the group said in the update.

The Rip Curl brand has strong customer loyalty. Picture: Brendon Thorne/Bloomberg

Excluding closed stores, however, direct to consumer sales were up almost 27 per cent for both Rip Curl and Kathmandu, while online sales soared 37 per cent.

Chief executive Xavier Simonet said Rip Curl’s strong performance highlighted the strength of the brand as more people took to surfing, with wholesale sales broadly at pre-pandemic levels.

“Rip Curl benefited from an increased opportunity for surfing while consumers worked from home, and demand for technical surf products was particularly solid,” Mr Simonet said.

“As for Kathmandu, camping and footwear categories have over-performed but have not compensated for the impact of COVID-19 with low footfall in CBD and tourist locations as well as lower travel-related purchases.”

Surfing boomed during lockdowns as people had more time on their hands. Picture: Laurent Masurel/WSL via Getty Images

Demand for core warmth and leisure products post-lockdown was strong, however.

The group bought Rip Curl late last year for $350 million, giving it a more diverse global footprint and adding summer apparel to its Kathmandu winter offerings.

Mr Simonet told the meeting the iconic surf wear chain had also added significant wholesale and licensing revenue streams.

“There remains a significant opportunity for Kathmandu to leverage Rip Curl’s proven wholesale expertise, relationships and global network to expand into new core target markets when the time is right,” he said.

“We are very pleased with the successful acquisition and integration of Rip Curl into the group.

Rip Curl has proved a wise acquisition for the Kathmandu group, offering seasonal diversification. Picture: Tim Hunter.

Mr Simonet said the group’s first-half result would be dependent on the all-important Christmas trading period, and the impact of COVID-19 on consumer sentiment remained a risk.

The retailer suspended dividends during the health crisis but said it intended to resume payments to shareholders subject to market conditions and trading performance after the first-half results were released.

Originally published as Iconic surf brand Rip Curl takes chill off Kathmandu’s winter woes