Outdoor stores to quit UK

KATHMANDU will shut its UK stores and abandon expansion plans in Europe to focus on fixing its struggling Australian business.

Newly installed chief executive Xavier Simonet revealed the change in strategy alongside a halving of the outdoor goods retailer’s full-year profit yesterday.

Net profit for the 12 months to July 31 fell 51 per cent to $18.48 million, a slightly better result than Kathmandu forecast a month ago.

Mr Simonet said the result highlighted the need to close its network of four unprofitable British stores, the first of which was opened 12 years ago.

He has also scrapped plans to open stores in Europe.

“However, that does not mean we won’t continue to grow internationally,” he said.

“There is strong international potential for the company.

“I would drive international growth through a capital-light model and online to make sure we get an acceptable return on our investments rather than invest in huge fixed cost structures that haven’t shown to work in the UK.”

He said he would reveal more details of the group’s international expansion plans in coming months.

Kathmandu will stick to its long-term target of 180 stores across Australasia, with three new outlets slated for 2015/16 along with the relocation of flagship stores in Melbourne and Adelaide.

The retailer, which has been fighting an attempted takeover by New Zealand’s Briscoe Group, said subdued Australian consumer sentiment had hit sales.