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Kathmandu slows down Aussie expansion

Outdoor clothing retailer Kathmandu is putting the brakes on its store expansion in Australia after racking up a first half loss.

南宁桑拿

Disappointing sales at Christmas and in January as well as heavy discounting on excess winter stock were blamed by the retailer for pushing it into the red with a $NZ1.8 million ($A1.75 million) loss.

The gloom looks likely to continue, with sales during the seven weeks to mid March down two per cent on a year ago.

Acting chief executive Mark Todd said the full year result will depend on Easter and winter sales, Kathmandu’s traditionally strongest trading periods.

In the meantime, the retailer will slow the pace of new store openings in Australia amid weak consumer spending.

“The long term target remains 180 stores but we need to pause for the next few months to see how trading goes in Australia,” he said.

“That will give us clarity as to when to start to look for new store sites again.”

The number of store openings in Australia this financial year has been reduced from 15 to 11, eight of which have already opened, with future store openings dependent on trading conditions.

Kathmandu has 159 stores across Australia, New Zealand and the UK.

Mr Todd said the variety of colours, styles and sizes of certain clothing ranges would also be reduced.

“We didn’t have very good results in Australia in particular on some of our high margin summer apparel groups like travel t-shirts, lightweight fleece and active wear,” he said.

Despite Kathmandu having flagged the loss in February, shareholders were disappointed with the result on Tuesday.

The stock was 20 cents, or 12.7 per cent, lower at $1.37 at 1504 AEDT.

Kathmandu now has a market capitalisation of about $316 million, nearly the same amount of cash Solomon Lew’s retail group Premier Investments has on hand for acquisitions.

However, Mr Todd knocked back suggestions that the company was a prime takeover target.

“A takeover is always possible at any point in time … that’s not a focus for management,” he told reporters.

OptionsXpress market analyst Ben Le Brun said nothing was off the table for Premier in regards to potential acquisitions.

“It’s pure speculation however Premier does go for those niche retailers,” he said.

“However, Kathmandu’s result is a big let down for the market with fairly big misses on most of the metrics, and that’s coming off fairly low expectations.”

Mr Todd will return to his dual role of financial director and operations chief when the company’s new chief executive Xavier Simonet starts on July 1.

POOR NEW YEAR SALES LEAD TO LOSS

* First half net loss of $NZ1.84m, from $NZ11.4m net profit

* Revenue of $NZ179.4m, up seven pct, from $NZ167.6m

* Unchanged fully-franked interim dividend of three NZ cents a share

 

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