Last Wednesday, Kathmandu released a mixed trading update ahead of the company’s 2019-20 annual meeting which was addressed by long time CEO, Xavier Simonet.
In the update, he revealed that the company’s sales had been held up by a full contribution from Rip Curl and that without that extra, sales were lower, especially in the core Kathmandu brand.
Thanks to Rip Curl sales across the group rose 73% in the first quarter of the company’s 2020-21 financial year, but sales in the company’s direct-to-consumer segment fell 21% thanks to the lingering impact of COVID-19.
Yesterday the CEO of the NZ-based company was out, gone to take the job as CEO of Austrade for the Australian government in what was a major surprise.
Investors took fright and the shares fell 5.3% to $1.16 in a completely understandable bout of nerves by the market.
In a statement to the market on Monday morning, Kathmandu said Mr. Simonet would stay with the company for the next six months or until he was released by the board.
“We are disappointed to lose Xavier, but understand his desire to take up a senior role in the Australian Public Service, for which he is very well credentialled,” Mr. Kirk said.
Senior appointments like the boss of Austrade take time and the company and Mr Kirk and the CEO would have had a very good idea about what was happening to the chief executive’s role at the AGM last week.
So news of the CEO’s departure five days later leaves a bit of concern about transparency and governance.