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- Kathmandu (KMD) has seen a surge in online sales and has begun to reopen its stores as coronavirus restrictions are slowly rolled back
- In April, the company’s online sales were 2.5 to three times higher than last year
- The online sales grew as customers adapted to online as their only available shopping channel
- Today, however, the company says plans to reopen its stores are advancing well
- The majority of Australian Kathmandu and Rip Curl stores are expected to reopen by the end of the week
- However, its Aussie stores will have hygiene protocols in place
- Despite an online sales spike, store closures have materially impacted the group’s financial year 2020 earnings, however, the full impact of COVID-19 can’t be forecast at this time
- Kathmandu is up 9.86 per cent on the market today, trading for 78 cents per share
Kathmandu (KMD) has seen a surge in online sales and has begun to reopen its stores as coronavirus restrictions are slowly rolled back.
In April, Kathmandu and Rip Curl continued to trade online in all international jurisdictions, with Kathmandu New Zeland selling only essential items online from April 3.
During the month, the company’s online sales were 2.5 to three times higher than last year, with Australia championing the highest growth rates. The online sales grew as customers adapted to online being their only available shopping channel.
CEO Xavier Simonet said over the past three years the company has been investing in its digital infrastructure. This has helped with the it’s online trading abilities.
“Our customers are clearly seeking products to support their active outdoor lifestyles, while coping with the social restrictions imposed by this global health crisis, he said.
Reopening stores
On April 1, Kathmandu closed all of its 327 international stores bar two. Most of its stores were closed in late March.
However, plans to reopen stores are advancing well. In Australia, over recent days, most Kathmandu and Rip Curl stores in New South Wales and Queensland have been reopened on a trial basis.
The majority of Australian Kathmandu and Rip Curl stores are expected to reopen by the end of the week.
Stores in New Zealand, North America, Europe, Brazil and Japan will remain closed until the Governments in each country gives the group the green light.
However, its Aussie stores will have hygiene protocols such as hand sinister, face masks, contactless customer service and social distancing. Kathmandu will also only allow a certain number of people in the store at once.
COVID-19 impact
Despite the surge in online sales, store closures have has a material impact on the group’s financial year 2020 earnings. The full impact of COVID-19 can’t be forecast without knowing when everything will return to normal.
“The group has responded decisively to the COVID-19 challenges as a team, with the aim of getting through this difficult period and coming out on an even stronger footing. In the medium term, consumer demand is expected to be subdued overall, and international travel reduced as a result of the ongoing economic and social impacts of COVID-19,” Xavier explained.
“However, there is a clear opportunity to answer the needs of our brands’ core consumers as they engage in active pursuits locally, on the beach, in the mountains and the outdoors,” he added.
Equity raise
Kathmandu recently completed its NZ$207 million equity raise, which received support from retail and institutional investors.
The funds have strengthened the company’s balance sheet and liquidity position.
Kathmandu is up 9.86 per cent on the market today, trading for 78 cents per share at 12:26pm AEST.
