Kathmandu expanded again, this time entering the United States
Kathmandu has seen the acquisition as a way of growth, as risky wholesale Christmas costumes chains have seen a substantial increase in sales and profits in the first half of the year.
In the six months to the end of January, the company’s profits increased by 23% to S$12.3 million, and its sales increased by 4.3%.
Kathmandu ignores the Christmas/New Year’s downturn reported by some retailers. In the six weeks to March 11, sales were 7.9% higher than last year. Same-store sales growth in Australia was 7.5%, and New Zealand was 5.1%.
Kathmandu announced that it will acquire U.S.Oboz Footwear for US$6 billion in cash and receive up to US$15 million in revenue.
Chief Executive Officer Xavier Simonet stated: “Achieving the right balance between promoting sales growth and improving gross profit margins contributed to the growth of health earnings in the first half of the year.
“The sales momentum has improved at the end of Christmas trading hours and in February and March.”
The acquisition of Oboz will be funded by institutional and sophisticated investors and a NZ$8 million stock purchase plan for a NZ$2.66 share placement fund at a price of 2.16 New Zealand dollars.
Oboz is an American outdoor shoe company founded in 2007 and headquartered in Bozeman, Montana. It designs, supplies and distributes footwear products for North American outdoor retailers through wholesale channels for backpacks, hiking, travel, winter and general outdoor clothing.
Simonet said: “This is an important event for the company, which has accelerated our international growth and diversified our product portfolio, geographical location and channels.”
After a series of promotions in 2015, the wholesale Christmas costumes retailer returned to profitability in 2016, confusing customers. Since then, Kathmandu has withdrawn from the UK sales network.
Simonet said that Kathmandu is focused on achieving profit growth in the core market during the second half of the fiscal year.