Surge in online sales and staged reopening of stores

Kathmandu Holdings Ltd
223 Tuam Street, Christchurch 8011 249 Park Street, South Melbourne, Victoria 3205
PO Box 1234, Christchurch 8140, New Zealand PO Box 984, South Melbourne, Victoria 3205, Australia
Phone: +64 3 373 6110 Fax: +64 3 373 6116 Phone: +61 3 9267 9999 Fax: +61 3 9267 9933
kathmanduholdings.com
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KATHMANDU HOLDINGS LIMITED

ASX / NZX / MEDIA ANNOUNCEMENT

5 May 2020


Surge in online sales and staged reopening of stores

• Surge in online sales and digital engagement
• Staged reopening of physical stores, with an absolute focus on employee and
customer safety
• Financial position strong following successful equity raising and cost reduction
initiatives

Kathmandu Holdings Limited (NZX / ASX: KMD) (the Group) today provides a further business update as it
actively monitors and adapts to the global COVID-19 coronavirus pandemic. The Group is taking every
precaution to help prevent the spread of COVID-19 and ensure the safety and wellbeing of its employees and
customers.

Surge in online sales and digital engagement
During the month of April, Kathmandu and Rip Curl have continued to trade online in all international jurisdictions,
with Kathmandu New Zealand selling only essential items online from 3 April.

During April, Group online sales were 2.5 to 3 times higher than last year, with the highest growth rates in
Australia, the Group’s largest market. Online sales growth strengthened over April as consumers adapted to
online being their only available shopping channel.

Group CEO Xavier Simonet said “The digital infrastructure and supply chain investments we have made over
the last three years have underpinned our ability to rapidly ramp up online trading capabilities and distribution
capacity in the face of unprecedented online demand. Our customers are clearly seeking products to support
their active outdoor lifestyles, while coping with the social restrictions imposed by this global health crisis. I would
like to thank all our team members from across all parts of our business, who have shown incredible resilience
and agility to support our online customers during these challenging times.”

Staged reopening of physical stores with an absolute focus on employee and customer safety
On 1 April 2020, the Group announced that all except two of its 327 international stores had closed, to protect
the safety of its employees and customers, and in accordance with Government directives. Most stores have
remained closed since late March 2020.

Plans for reopening physical stores are well advanced and the Group looks forward to welcoming customers
back into stores only when it is safe to do so.

In Australia, over recent days, most Kathmandu and Rip Curl stores in New South Wales and Queensland have
reopened on a trial basis, with robust safety protocols in place. The majority of Australian Kathmandu and Rip
Curl stores are expected to reopen by the end of this week.

Kathmandu and Rip Curl stores in New Zealand, North America, Europe, Brazil and Japan remain closed and
will reopen as soon as Government directives in each jurisdiction allow.

Stores will reopen with the following additional safety protocols in place:
• Protective items such as hand sanitiser and face masks;
• Contactless customer service and payment;
• Social distancing measures between customers and team members; and
• Customer capacity limits in stores.

Kathmandu Holdings Ltd
223 Tuam Street, Christchurch 8011 249 Park Street, South Melbourne, Victoria 3205
PO Box 1234, Christchurch 8140, New Zealand PO Box 984, South Melbourne, Victoria 3205, Australia
Phone: +64 3 373 6110 Fax: +64 3 373 6116 Phone: +61 3 9267 9999 Fax: +61 3 9267 9933
kathmanduholdings.com
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Financial position strong following successful equity raising and cost reduction initiatives
The Group recently successfully completed a fully underwritten NZ$207 million equity raising, which received
strong support from retail and institutional investors. The equity raising strengthened the Group’s balance sheet
and liquidity position, ensuring it remains well capitalised to navigate through the current trading uncertainties
caused by COVID-19.

In addition to the equity raising, the Group continues to implement a series of actions to reduce costs and further
strengthen its financial position:
• Reviewing all operating expenses for potential savings, including the completion of a significant
restructuring program for head office functions that is expected to generate c.NZ$15 million of
annualised cost savings;
• Utilising Government subsidies in Australia, New Zealand, and Europe;
• Negotiating with landlord partners to achieve a fair outcome that sees rental costs aligned to sales
performance;
• Delaying and cancelling existing inventory orders where possible, based on reduced levels of expected
demand in the medium term; and
• Cancelling or deferring all non-essential capital projects, which includes planned ERP spend and store
refurbishments.

Outlook
The closure of the Group’s store network since late March has had a material adverse impact on FY20 earnings,
as expected. As stores begin to reopen in Australia, the full impact of COVID-19 on the Group, including its
wholesale channel and partners, cannot be forecast without knowing the timetable for a return to more normal
trading conditions in the many international jurisdictions in which the Group operates, and having a clearer view
on the level of consumer demand.

Commenting on the latest outlook, Xavier Simonet said “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. 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.”

“In this context, we will maintain a strategy focused on brand, product and customer, while continuing to diversify
the business and accelerate digital transformation. We are a global outdoor and action sports company
underpinned by iconic brands, technical products and a focus on sustainability. In Kathmandu, Oboz, and Rip
Curl, we have authentic and inspirational brands that will continue to attract loyal consumers for the long term.”


- ENDS -



This announcement has been authorised for release by the Board.


For further information, please contact:

Investors
Eric Kuret
Market Eye
P: +61 417 311 335



Media
Helen McCombie
Citadel-MAGNUS
P: + 61 2 8234 0103