KMD Kathmandu Brands

[winner (n)]

Kathmandu acquired Rip Curl in 2019 for $368m .... and raised new capital at $2.55 a share

Rip Curl reportedly had sales of $550m at that time (FY19) and EBITDA of $52m

Of course the acquisition was going to be EPS accretive - said at least 10% in first year

Come 2026 and sales are still about $550m but making stuff all profit - EBIT say $9m

I appreciate times have been tough at times since the acquisition but one would have to say this has been an unmitigated disaster

In spite of all management ravings about how great they are things not getting much better - and still going backwards. Hard to see much real improvment

I'd have to say the whole acquisition has been executed poorly .... lets blame management eh

Of course the writing was on the wall when they mentioned EPS accretive and capturing synergies. Never been EPS accretive and as the old saying 0f 'where did the synergies go' comes true again

Never mind they say things coming right - hang in there comes to mind

PS - tested carrying value of goodwill in last report - budgets and forecasts say goodwill number all OK

[Recaster]

PS - tested carrying value of goodwill in last report - budgets and forecasts say goodwill number all OK

Lol. Scam.

[Basil]

NBR has a great article on this fiasco.
Apparently management's attitude at the analysts briefing was this was all just "business as usual" and there's nothing untoward with raising capital at a ~70% discount to last traded price !   Some brokers happy to clip the ticket for millions and to hell with the discount and how its decimated the share price..
Yeah, everyone here is acting in the best interests of shareholders...(sarcasm). Someone please hand me a Tui .

[winner (n)]

Apparently mid way through the presentation at the Investor call the other day any media who had signed in were told no media quastions but you stay logged in and listen to analysts quastions.

And mid one question Scrimshaw interrupted and said 'no more questions and thank you for dialling in blah blah'

Arrogant lot

[Recaster]

Apparently mid way through the presentation at the Investor call the other day any media who had signed in were told no media quastions but you stay logged in and listen to analysts quastions.

And mid one question Scrimshaw interrupted and said 'no more questions and thank you for dialling in blah blah'

Arrogant lot

Typical new zealand. Corrupt to the core.

[Shareguy]

PS - tested carrying value of goodwill in last report - budgets and forecasts say goodwill number all OK

Lol. Scam.

Agree. Looking at the last annual report goodwill is huge and I would have thought big write downs should have been completed in result. How long to wait until the share consolidation happens.

[winner (n)]

Agree. Looking at the last annual report goodwill is huge and I would have thought big write downs should have been completed in result. How long to wait until the share consolidation happens.

arrying value of Kathmandu brand $273m / Oboz $33m (after a couple of decent impairments) and Rip Curl at $264m

In total Intangibles are $626m - with Shareholder Equity at $689m. No worries as they are a owner and operator of brands lol

No wonder Recaster makes the comments he does.

[winner (n)]

Good article innBusinessDesk today "How Allbirds went extinct"

Prob paywalled. https://businessdesk.co.nz/article/retail/how-allbirds-went-extinct

Couldn't but think one could pen a piece about Kathmandu along the same 'extinct' Is taking longer than Allbirds but same sort of trend.

[Basil]

To be fair, there were huge customer concerns about the durability of Allbirds gear.   Maybe to some extent there is also concerns around the durability of KMD clothes ?

[mike2023]

I hope they have plenty of stock on hand, apparently nylon has increased in price substantially,  50% from memory. 
Hemp, cotton and wool back in flavor?

I can see a scenario where kmd are gone before Xmas.

[entrep]

I used AI to help put the following thoughts into words.

The Kirk Legacy: A Masterclass in Shareholder Value Destruction

I've sold out of KMD after years of pain. Cost basis ~$1.20, sold at 9 cents. I'm done. But before I go, I want to put the full picture in one place, because I think the scale of what's happened here deserves to be spelled out clearly.

David Kirk has been Chairman for 13 years. In that time he has presided over three capital raises:

2019: $145m raised at $2.55 per share (to buy Rip Curl)
2020: $207m raised at $0.50 per share (COVID)
2026: $65m raised at $0.06 per share (to avoid covenant breach)

That's roughly $417 million in equity raised from shareholders. The current market cap is about $108 million. Let that sink in. Shareholders have tipped in four times what the entire company is now worth, and they have nothing to show for it. No dividends since 2024. No profits. Just a share price chart that looks like a ski slope.

The numbers tell the story:

In FY18, before the acquisition spree, Kathmandu was doing ~$497m in sales with ~$51m profit, a margin above 10%, and ROE of nearly 14%. There were 211 million shares on issue. It was a well-run, profitable outdoor retailer.

Fast forward to FY25: sales have doubled to $989m but the company lost $93.6 million on a statutory basis and $28.3 million on an "underlying" basis. There are now going to be ~1.8 billion shares on issue. Shareholders' equity has been inflated by capital raises and hollowed out by losses and impairments. The intangibles on the balance sheet ($626m) are worth more than the equity ($690m) and roughly six times what the market says the whole company is worth.

All that capital raised. All those acquisitions. Sales doubled. And the result is... losses, dilution, and a share price down 97% from the 2019 raise price.

The Rip Curl acquisition has been an unmitigated disaster. Bought for $368m in 2019 when it was doing ~$550m in sales with ~$52m EBITDA. They told us it would be "at least 10% EPS accretive in the first year." Come 2026, Rip Curl sales are still ~$550m and it's making stuff-all profit. The whole group is now worth less than what they paid for Rip Curl alone. If that isn't a failed acquisition, I don't know what is.

And then there's the director share purchases. In September-October 2025, no fewer than seven directors and insiders bought shares on-market at prices between 25 and 30 cents. Kirk himself bought 700,000 shares at ~30c. Five months later, the company did a capital raise at 6 cents — a 77-80% haircut from where the directors were buying.

So either:

(a) They didn't know a capital raise was coming, which is a governance failure of the first order, or
(b) They did know and bought anyway, which raises its own set of questions about judgment

Neither explanation covers them in glory.

Let's also talk about what Kirk was saying while all this was happening. At the November 2025 AGM — four months before the emergency capital raise — he told shareholders: "We believe KMD Brands is materially undervalued" and expressed confidence in the Group's "ability to self-fund key initiatives." Self-fund. Those were his words. Four months later, shareholders are being asked for $65 million at 6 cents a share just to keep the banks happy.

And the February 2026 trading update — less than two months before the raise — talked about "sales momentum," covenant compliance, and discussions with lenders about refinancing. No hint that a massively dilutive emergency equity raising was weeks away. Shareholders who bought on that update at 20-24 cents got wiped out.

For context, Rod Duke offered to buy this company in 2015 for ~$1.80 per share. The independent adviser, Grant Samuel, told shareholders the company was worth $2.10-$2.41 and recommended they reject. They did. Today the shares trade at 6-7 cents. Every single shareholder who followed that advice has been annihilated. Meanwhile Briscoe Group shares have gone from $2.79 to $4.60 over the same period. The road not taken.

I know Kirk is finally leaving as part of this raise. Good. It should have happened years ago. But his departure doesn't undo the damage. Bowman (8+ years on the board), Martens, and others who sat alongside him through all of this should be asking themselves serious questions too.

On the flip-side, the Q1 FY26 numbers were the first encouraging sign in years. But I've heard "it's turning the corner" from this company too many times and been burned every single time. At some point you have to ask: is this a turnaround, or is it just another chapter in the same story?

Good luck to all.

[Shareguy]

Great post Entrep. Kirk has a lot to answer for. Agree the other directors need to go as well. What a disappointment.

[Auto Rower]

I know Kirk is finally leaving as part of this raise. Good. It should have happened years ago. But his departure doesn't undo the damage. Bowman (8+ years on the board), Martens, and others who sat alongside him through all of this should be asking themselves serious questions too.

On the flip-side, the Q1 FY26 numbers were the first encouraging sign in years. But I've heard "it's turning the corner" from this company too many times and been burned every single time. At some point you have to ask: is this a turnaround, or is it just another chapter in the same story?

Good luck to all.

That most of been a hard painfull call after hanging on so long & losing so much but A very brave decision in so many ways .well done thanks for sharing entrap

[Basil]

Top post Entrep. A complete disgrace. Management on the call acting like it's business as usual and there's nothing untoward about issuing vast numbers of shares at a 70% discount to last traded price tells you all you need to know about the calibre of senior management and the board.

Recent comments from management and the board may be actionable in terms of how vastly different they were from the truth. ATM just settled a class action for similar "disingenious" forward commentary several years ago. If I was a large shareholder I'd be talking to other shareholders about a class action lawsuit.

[Crackity]

KMD Brands Limited appoints global retail and transformation leader as non-executive director
 
 KMD Brands Limited (ASX/NZX: "KMD", "KMD Brands" or the "Group") today announces the appointment of Ian Morrice as an independent non-executive director to the Board, effective 20 August 2026, following the Board renewal process announced in May 2026.
 
 Mr Morrice brings more than 30 years of senior leadership, business transformation and strategic advisory experience across the retail, consumer and wholesale sectors in New Zealand, Australia, the United States and United Kingdom.
 
 He is best known for his leadership of large publicly listed businesses, including as Group Chief Executive Officer of Metcash Limited and Chief Executive Officer of The Warehouse Group, where he led business transformation initiatives, strengthened organisational capability and delivered shareholder value.


I'd be taking WHS off my resume if I'd been CEO.....