KATHMANDU BUY SIGNALS A MOVE INTO US MARKET
OUTDOOR apparel and equipment retailer Kathmandu has acquired a US shoe wholesaler as it dips it toes back into international expansion.
Kathmandu has agreed to buy Montana based hiking boots wholesaler Oboz for $US60 million ($A77.7 million) with the prospect of an additional payment of up to $US15 million if Oboz achieves certain financial milestones this year.
It’s Kathmandu’s first international acquisition since it closed its loss-making British brick-and-mortar stores and scrapped plans to expand into Europe about three years ago under the leadership of the then newly installed chief executive Xavier Simonet.
Mr Simonet had announced at the time that the company needed to focus on its core market – Australia – which was struggling with sales and profit declines. He also said any international expansion would be through the less risky online or wholesale models rather than physical stores.
At that time, Kathmandu’s shares were at all-time lows following a string of profit downgrades and it faced a hostile takeover bid from New Zealand retailer Briscoe Group.
Mr Simonet successfully fended off Briscoe and revamped the group’s product range, leading to a sales and profit recovery that began in 2016. On Tuesday, after unveiling a 23 per cent lift in first half profit, Mr Simonet said the time was now right to pursue international expansion.
He said there was a need to find new growth opportunities because while Australia still had room for growth its other market, New Zealand, does not.
“Acquiring Oboz is consistent with our international growth strategy to pursue a lower risk model because Oboz is a pure wholesale player,” he said. “It also advances Kathmandu from being a Australasian retailer to being a global outdoor apparel and equipment brand.”
Oboz, which designs, sources and sells footwear for backpackers and hikers, distributes its products primarily to North American outdoor and sporting goods chains and to limited online sellers.
“Oboz is a great business with annual sales of around $US30 million and an average sales growth of 40 per cent over the past few years,” Mr Simonet said.