Kathmandu ponders shape of leadership
‘Options open’ on need for group CEO after Simonet’s exit, says chairman
Kathmandu is keeping its options open in regard to a new group chief executive following Xavier Simonet’s resignation on Monday. French-born Simonet has been chief executive of dual-listed Kathmandu for the past five and a half years and group CEO for just over a year following the company’s merger with Rip Curl.
Chairman David Kirk said the board would consider whether the outdoor clothing and equipment retailer still needed a group chief executive as it already had CEOS for both the Kathmandu and Rip Curl brand — Reuben Casey and Michael Daly.
“We’ll need to think about it carefully — I wouldn’t rule anything out,” Kirk told the AFR.
Simonet is widely touted as having put in a good performance as CEO. He was behind two major acquisitions — wholesale footwear business Oboz, and more recently surfing brand Rip Curl, which the group is just beginning to reap the benefits of.
Simonet advised the Kathmandu board of his intention to resign two days after the company’s annual meeting. He will take on a new role of chief executive of the Australian Trade Commission, Austrade.
Edward Glennie, head of equities at Hobson Wealth, said Simonet’s resignation came as a surprise, particularly as it was just over a year after the major acquisition of Rip Curl and he was yet to see the real benefits of the takeover for the group.
Glennie said he believed the Kathmandu board would appoint another group CEO, but it was being cautious to manage market expectations as it could take time to secure a replacement due to global disruption from the pandemic.
“He is staying on for six months — he’s giving quite a lot of notice — so Iwouldn’t be surprised if that’s just their first reaction, but no doubt they’ll likely release him early.
“I think they just want to make it look like that they are not entirely dependent [on a newgroup CEO], but I’d be quite surprised if they didn’t get [a replacement] over time.”
Kathmandu’s performance over the past five years had been good, Glennie said, and it had returned about 12 per cent of profits per annum since Simonet became CEO in June 2015. He had led the company through a period of growth and successfully repositioned the company, he said.
Simonet had made the Kathmandu brand mainstream, and had also been responsible for the company’s industry-leading environmental, social and corporate governance sustainability focus, Glennie said.
It has set itself a goal of having net-zero
2025.
“He has done a good job . . . but it’s a bit disappointing that he is leaving at a time when he hasn’t really seen the whole benefit of that Rip Curl acquisition.”
Kathmandu’s group revenue has taken a $135 million hit due to Covid19. In the first quarter of its current financial year to October 31, group sales increased by 72 per cent on the same period a year earlier — its earnings were boosted by the “transformational acquisition” of Rip Curl, the company said in a trading update released to the NZX at the end of November.
On the group’s performance this year, Glennie said: “Kathmandu has a big footprint and stores that have been affected by Covid, but we hold a neutral view — we’re not overly positive, but we’re not overly negative.”
Kathmandu put is dividend payments on hold in September following its $200m capital raise in April in an attempt to cushion the Covid blow.
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