Function over fashion the key for Kathmandu
The nation’s love for puffer jackets has driven a record profit haul for Kathmandu, now they hope to continue their success by ramping up their summer offering. And their not the only one cashing in on the “athleisure” trend.
Business
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Kathmandu chief Xavier Simonet says a focus on function rather than fashion is resonating with customers as the nation’s love for puffer jackets drives a record profit haul.
The outdoor clothing retailer, whose black puffer jackets are ubiquitous during the cooler months, is also moving to ramp up its summer offering.
Shares in Kathmandu jumped yesterday after it posted double-digit profit growth and said it had enjoyed a strong start to trading in its new financial year.
“We just focus on what we do best, which is design and bring to market products that answer the needs of our customers when they go to the outdoors and when they travel,” Mr Simonet told Business Daily.
“We are not a fashion company. We are a brand that offers solutions through technical and functional products. We hope that resonates and brings us sales and profit.”
Kathmandu may not view fashion as being core to its business, but like athleisure before it, clothing once reserved for hiking trails has gone mainstream.
That is helping it, as well as rivals Macpac, Patagonia and The North Face, outperform in a retail market that has left many by the wayside.
Luxury fashion labels including Gucci, Louis Vuitton and Prada have moved to cash in on the trend, releasing expensive hiking shorts and fleeces.
The Australian market is also attracting international attention with premium Canadian outdoorwear brand Arc’teryx opening its first Australian outlet at Melbourne’s Emporium shopping centre in July.
Net profit at Kathmandu, which is based in Christchurch and has a listing on the Australian Securities Exchange, jumped 13.7 per cent to a record $NZ57.6 ($53.4 million) for the year to July, it reported yesterday.
Strong sales in Australia and the $97 million acquisition of US-based hiking boots business Oboz more than offset a slowdown in New Zealand brought on by what the group said was a late start to winter conditions.
Sales rose 9.7 per cent to $NZ545.6 million ($505.13 million).
Sales in Australia — its biggest market — rose 4.5 per cent to $321.4 million. Like-for-like sales, which strip out the impact of stores opening and closing, grew 2.7 per cent.
Kathmandu is moving to diversify its sales base using the Oboz acquisition to grow in the US.
It will sell its products through general retailers rather than open stand-alone stores and the push into the home territory of key rivals such as The North Face will give it a winter market when it is summer here.
Mr Simonet said the retailer was looking to grow its summer sales by focusing on “adaptive products” that could be used in various situations.
Shares in Kathmandu rallied 7.6 per cent, or 20c, yesterday to $2.83.
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