Recovering Kathmandu pays $2m in bonuses
When Xavier Simonet began at Kathmandu three years ago, the company’s shareholders were in a dilemma.
Should they sell to Briscoe Group, which had mounted a hostile takeover bid for the duallisted outdoor clothing company, or should they trust the incoming chief executive, whose CV suggested a capable retail hand?
This week Kathmandu’s annual results showed that their faith in Simonet may have been well founded.
The company made a record $497.4 million in sales, up 11.7 per cent for the year to July 31.
Net profit was also a record, up by a third to $50.5m, and a long way from the $20.4m it plunged to in 2015.
French-born Simonet, who has worked for LVMH and turned around London accessory firm Radley, has been steadily following a familiar formula.
He has been controlling costs, strengthening margins, enhancing Kathmandu’s image at home and developing a long-term growth plan overseas.
The company has upgraded stores, invested in an automated sorting machine in Australia to speed up deliveries, and took a hard look at its marketing spend.
He said: ‘‘We’ve done a lot of work trying to be a more inspirational brand, telling our story through social media and digital marketing around the brand story and also the key values of the company, like sustainability.’’
Simonet also credits the innovation of the Christchurch-based design team, as well as improvements on the shop floor that mean staff close more sales.
This week the company said it had set aside $2m in the form of $1000 bonuses for permanent staff not in an incentive scheme.
The past few years have been a particularly competitive time in the New Zealand clothing industry. A key rival, Macpac, was bought out by Australia’s Super Retail Group this year from private equity and original Kathmandu co-founder Jan Cameron.
But this week Kathmandu’s shares – which slunk to just under $2 in 2015 – were back to about $3.20, up 50 per cent over the past year.
Would-be suitor Briscoe Group continues to hold 18.9 per cent of Kathmandu but trimmed its shareholding in August, stepping away from the takeover bid trigger point of 19.9 per cent.