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Last year, Kathmandu launched a line of “Buy NZ Made” shirts made of merino wool.
Outdoor clothing firm Kathmandu has laid off 34 of its New Zealand workers as it cuts costs and prepares a staggered opening of its physical stores.
The company said that Covid-19 and the subsequent closure of its global network of stores had prompted a restructuring program at its Kathmandu brand, the Ripcurl surfware business and the American footwear business Oboz.
Kathmandu said it was using government wage subsidies to “support its employees as long as possible.”
No further layoffs were planned.
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Kathmandu, which is based in Christchurch and Melbourne, has secured more than $ 3.6 million in wage subsidies for 601 employees.
It also reached out to shareholders to raise $ 207 million in capital in April.
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Merino wool was obtained in the high country of the South Island for Buy NZ T-shirts in Kathmandu, but had to be sent abroad for processing.
Chief Executive Xavier Simonet told NZX Tuesday that store closings were expected to have a significant adverse impact on earnings this year, but the company was well capitalized and would continue to seek cost cuts.
The headquarters restructuring was expected to save $ 15 million annually, and the group would continue to access government subsidies, negotiate rents, and delay or cancel existing inventory where possible, to meet what was expected to be moderate consumer demand. in the medium term. .
Meanwhile, the company plans to open its physical stores in stages, starting with Australia.
Most Kathmandu and Rip Curl stores in New South Wales and Queensland have been reopened on a trial basis, with established security protocols, and most of their Australian stores will reopen later this week.
All but two of its 327 stores internationally closed on April 1.
Store openings in New Zealand, North America, Europe, Brazil and Japan would reopen as soon as government directives in each jurisdiction allowed, Simonet said.
Meanwhile, shoppers had been on their websites, and Kathmandu and Ripcurl had enjoyed increased online sales, though they were only able to sell essential items in New Zealand for the month.
Online sales across the group increased 2.5 to three times more than the same period last year.
Simonet said investments in digital channels and supply chains have paid off, allowing him to “rapidly increase online commerce capabilities and distribution capacity against unprecedented online demand.”
Before the outbreak, Kathmandu posted a net profit of $ 8.1 million for the six months to January 31, a decrease of $ 14 million from the previous year, although sales increased.
In addition to the April capital increase, the group raised A $ 350 million (NZ $ 368 million) last year to buy Rip Curl and paid nearly $ 100 million for Oboz in 2018.
One shareholder who declined to participate in the most recent capital increase is the Kiwi retailer Briscoe Group, which has been selling its stake.
Briscoe tried unsuccessfully to buy Kathmandu in 2015, but held a key stake until recently, reducing its stake from 16.29% to 6.771% last month.
