Kathmandu Steps Up Plan To Reopen Stores

Outdoor wear retailer Kathmandu has stepped up the re-opening of outlets. The group has been slowly re-opening outlets in Australia and now wants to accelerate the pace to where most of its stores in Australia will be open and trading by the end of this week as the COVID-19 restrictions are eased.

Australia and New Zealand have taken the first steps to relaxing restrictions since the start of last week (in NZ) as the number of new COVID-19 cases remains low except for worrying clusters in Sydney and Melbourne

Social distancing rules though will keep businesses on a short leash.

Investors liked the news, sending the shares up 10.5% yesterday to close at 78.5 cents.

The company said it had reopened its Kathmandu and Rip Curl stores in NSW and Queensland on a trial basis in recent days and had decided to expand the move to the majority of its stores in Australia.

Stores will reopen with additional safety protocols such as hand sanitiser and face masks, contactless customer service and payment, in-store customer limits, and social distancing between customers and team members. That’s like existing chains have been doing during the lockdown, such as supermarkets and fresh food chains (Harris Farms in Sydney).

But Kathmandu and Rip Curl stores in New Zealand, North America, Europe, Brazil, and Japan will remain closed amid ongoing efforts to contain the coronavirus pandemic and would only reopen based on government directives in each country, the company said yesterday.

The retailer shut most of its 327-store international network in late-March as governments imposed strict lockdowns including social distancing rules in an effort to contain the spread of coronavirus.

Kathmandu stood down most employees, but like so many other retailers, kept its online stores open which saw a surge in business.

Kathmandu said online sales jumped 2.5 to 3 times in April compared with a year earlier, with the highest growth rates in Australia.

“Our customers are clearly seeking products to support their active outdoor lifestyles, while coping with the social restrictions imposed by this global health crisis,” group chief executive Xavier Simonet said in yesterday’s statement.

He said investments in digital infrastructure and supply chain during the past three years had allowed the group to rapidly ramp up online trading and distribution capacity in the face of unprecedented online demand.

Despite that growth, the closure of the store network since late March had had a material adverse impact on full-year earnings, the company said.

Kathmandu raised $NZ207 million ($A201 million) through a capital raising in April to strengthen its balance sheet and cut debt taken on the finance the purchase last year of Rip Curl.

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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