KMD Brands, the Christchurch company behind Kathmandu, bought Oboz in 2018 and Rip Curl in 2019 to become a global outdoor group. Sales reached NZ$1.053bn in FY26, but the group reported a statutory loss of NZ$414.4m after writing down goodwill and brands. It has raised NZ$65.3m of equity, stopped dividends, rejected a proposal to demerge Rip Curl and confirmed indicative approaches from outside parties. Kathmandu, the original brand, is now the fastest growing.
KMD Brands is a lesson in how hard it is to turn a successful single-brand retailer into a multi-brand group, even when the brands acquired are good ones. This article explains how Kathmandu began, how the group makes money, why it bought Rip Curl and Oboz, what the FY26 results and write-downs reveal, who now owns the company and what a strategic review and outside approaches could mean. It is part of the New Zealand Company Stories hub.
How big is KMD Brands?
FY26 sales were NZ$1.053bn: Rip Curl NZ$571.2m, Kathmandu NZ$402.3m and Oboz NZ$79.5m. Underlying EBITDA was NZ$42.0m, a margin of about 4%.
Why was the loss so large?
The statutory loss of NZ$414.4m was driven by a non-cash impairment of goodwill and brand assets of about NZ$394m after tax. The underlying loss was NZ$9.0m.
Is the company for sale?
The board has received indicative approaches and says no decision has been made. It rejected a proposal from a US surfwear group to demerge Rip Curl.
How did Kathmandu begin?
Kathmandu was founded in 1987 by John Pawson and Jan Cameron, who sold outdoor clothing and equipment under their own label through their own shops. It grew by owning both the brand and the stores, a vertical model that was rare in outdoor retail at the time.
The company was run from Christchurch and had opened stores in Sydney, Melbourne, Brisbane and Canberra by 1992. Its formula combined technical products such as down jackets, packs and tents with a pricing strategy familiar to New Zealand shoppers: high ticket prices, a membership club and deep seasonal sales, especially at Easter and in winter.
In 2006 Cameron sold the business to private equity firms led by Quadrant for NZ$275m. The new owners expanded the store network and in November 2009 floated Kathmandu Holdings on the New Zealand and Australian stock exchanges. For the next decade it was a steady, profitable retailer whose results depended heavily on how cold the Australasian winter was.
That dependence explains what followed. A single brand selling insulation to two countries with mild climates has an obvious ceiling, and its earnings swing with the weather. The board’s answer was diversification by acquisition.
How does KMD Brands make money?
The group designs products under three brands, has them made by contract manufacturers mostly in Asia, and sells them through its own stores and websites and through wholesale accounts. Group gross margin was 57.7% in FY26.
The mix of channels differs by brand. Kathmandu is almost entirely direct-to-consumer, with stores across New Zealand and Australia and an online business. Rip Curl is roughly split between wholesale to surf shops and department stores worldwide and its own retail, with 166 owned stores at the end of FY26 plus licensees. Oboz, a hiking footwear brand from Montana, sells mainly through North American outdoor retailers.
High gross margins do not translate into high profits because the cost of running stores, marketing three brands and supporting operations on several continents consumes most of it. Underlying EBITDA of NZ$42.0m on NZ$1.053bn of sales is a margin of about 4%. After depreciation and interest the group made an underlying loss of NZ$9.0m.
The contrast with a focused domestic retailer is instructive. Briscoe Group earns a lower gross margin, about 39%, yet converts over 7% of sales into net profit because it runs two chains in one country with no debt.
Why did Kathmandu buy Oboz and Rip Curl?
To reduce its reliance on winter, on Australasia and on one brand. Oboz, bought in 2018, brought footwear and North America. Rip Curl, bought in 2019 for A$350m, brought summer, surf and a global wholesale network.
On paper the logic was sound. Rip Curl, founded at Bells Beach in Victoria in 1969, is one of the three great surf brands and sells most strongly in the months when Kathmandu is quiet. Oboz gave access to the large American hiking market. Together they would balance the seasons and open distribution that Kathmandu could later use for its own products.
The Rip Curl deal was announced in October 2019, funded by a combination of new equity and a large increase in bank debt. Within months the pandemic closed stores worldwide. The group came through the period with government wage support and a further capital raising, and in March 2022 it renamed itself KMD Brands to reflect the broader portfolio. In 2021 it reported revenue of NZ$923m and a healthy profit as outdoor demand boomed.
The synergies proved thin. The three brands share little in customers, product or sales channels. Kathmandu’s attempt to sell internationally under the group’s wing made slow progress. What the acquisitions did deliver was scale, complexity and a balance sheet that left less room for error when the cycle turned.
What went wrong after the pandemic boom?
Demand fell, costs rose and the weather turned warm. Outdoor and surf retailers worldwide were left with excess stock after 2022, wholesale customers cut orders, and Kathmandu suffered several mild winters in a row.
The numbers deteriorated quickly. In FY25 the group reported sales of NZ$989m and a net loss of NZ$93.6m, including a NZ$45.5m write-down of Oboz, which made an EBITDA loss of NZ$3.3m. Dividends had already been suspended in 2023. Management under chief executive Brent Scrimshaw, a former Nike executive who took the role in 2025, announced a cost-reduction target of at least NZ$25m and the closure of about 21 stores globally.
In 2026 the board went further. It raised NZ$65.3m of new equity in an underwritten offer priced at a deep discount, and it launched a strategic review. That review included testing buyer interest in Ozmosis, Rip Curl’s multi-brand surf retail chain in Australia, and deciding to sell Rip Curl’s wetsuit factory in Thailand with a 12-month phase-out. No acceptable offer emerged for Ozmosis, which the group is keeping while closing five stores.
What do the FY26 results show?
They show an operating recovery overshadowed by an accounting reckoning. Sales rose 6.5% to NZ$1.053bn and underlying EBITDA more than doubled to NZ$42.0m, but impairments produced a statutory net loss of NZ$414.4m.
Kathmandu led the improvement. Its sales rose 11.1% to NZ$402.3m despite a net reduction of four stores, helped by a colder winter and a refreshed range. Rip Curl grew 3.8% to NZ$571.2m, with its North American business returning to profit, and Oboz grew 3.8% to NZ$79.5m. Gross margin widened to 57.7% from 56.5%. Rip Curl closed 11 stores and opened five, and cut more than 2,000 product lines.
The write-down, about NZ$394m after tax, is an admission that the goodwill and brand values recorded when Rip Curl and Oboz were bought can no longer be supported by expected cash flows. It does not consume cash, but it erases most of the value the acquisitions added to the balance sheet. Net debt was NZ$48.1m, slightly lower than a year earlier, and no dividend was declared.
For FY27 the company has guided to sales of NZ$1.055bn to NZ$1.075bn and EBITDA of NZ$52m to NZ$55m, with capital expenditure held to about NZ$15m. In the first seven weeks of the new year Kathmandu’s same-store sales were up 7.4% and Rip Curl’s up 1.0%, while Ozmosis was down 12.1%.
Who owns and governs KMD Brands?
KMD Brands is listed on the NZX and ASX with an institutional register and no controlling shareholder. The value manager Allan Gray Australia held about 18% in 2026, and New Zealand’s state investment funds have been significant holders.
Other names on the register tell their own story. The NZ Super Fund and the Accident Compensation Corporation have been reported as substantial shareholders, as has Briscoe Group, which built a stake of just under 20% in 2015 during an unsuccessful takeover bid for what was then Kathmandu and has since been diluted by successive capital raisings. The sovereign fund’s approach to such holdings is described in the piece on the NZ Super Fund.
The board is chaired by Philip Bowman, a veteran of international consumer and industrial companies, with Carla Webb-Sear as chief financial officer alongside Scrimshaw. An open register and a depressed valuation make the company vulnerable to approaches, and the board has acknowledged receiving them.
Why did the board reject a Rip Curl demerger?
The board concluded that the proposal from Stokehouse Unlimited, a US surfwear group, to separate Rip Curl did not offer shareholders better value than keeping the brands together and fixing them. It left the door open to other proposals.
The case for a split is easy to state. Rip Curl accounts for more than half of sales, operates in a different industry from Kathmandu and would be worth more to a specialist surf owner able to combine sourcing and distribution. Selling it would also eliminate debt.
The case against is about price and timing. Selling a brand just after writing it down, in a weak market for surf apparel, risks crystallising the loss. A separation would also leave stranded head-office costs with a much smaller Kathmandu and Oboz. The board’s statement that it has received indicative approaches, that no decision has been made and that no transaction is certain suggests it is weighing a sale of the whole against a sale of parts.
Who are KMD Brands’ competitors?
Each brand faces different rivals. Kathmandu competes with Macpac, The North Face and Patagonia; Rip Curl with Billabong and Quiksilver; and Oboz with Merrell, Salomon and Keen in hiking footwear.
Kathmandu’s closest competitor at home is Macpac, another Christchurch-born brand now owned by Australia’s Super Retail Group, which follows a similar own-brand, own-store model. At the bottom of the market, discounters such as Kmart sell basic outdoor wear at a fraction of the price, while at the top global technical brands command more loyalty among serious users.
In surf, Rip Curl’s long-standing rivals are now owned by brand-management companies that license names rather than run operating businesses. That leaves Rip Curl as one of the few large surf brands still designing, making and selling its own products, a distinction that is costly to maintain.
New Zealand has produced other outdoor and apparel brands that ended up in foreign hands, a pattern explored in the article on Allbirds and Icebreaker. The fate of local outdoor retail more broadly, including the sale of Torpedo7 for a dollar, is covered in the piece on The Warehouse Group.
What are the main risks for KMD Brands?
The main risks are weather, weak consumer spending in Australia and New Zealand, exposure to US tariffs on Asian-made goods, the cost of a large store network and uncertainty over ownership while approaches are considered.
Weather is the oldest and least controllable. Kathmandu earns a large share of its annual profit in a few winter weeks. Tariffs are newer: Oboz and Rip Curl’s American business import products made largely in Asia, and higher duties must be absorbed or passed on. The wider effect on exporters is discussed in the article on New Zealand and the 2025 US tariffs.
There is also execution risk in the restructuring. Offshoring shared services, exiting manufacturing and pruning ranges all save money, but each can disrupt supply or service. And a prolonged sale process distracts management and unsettles wholesale customers and staff.
What can founders and CFOs learn from KMD Brands?
The core lesson is that diversification changes a company’s risk without necessarily reducing it. KMD Brands swapped dependence on one winter for exposure to global wholesale cycles, currency, debt and integration.
- Counter-seasonal is not the same as synergistic. Rip Curl balanced the calendar but shared no customers or channels with Kathmandu.
- Debt-funded deals shorten your runway. Borrowing to buy at the top of a cycle left little margin when demand fell.
- Vertical retail and wholesale are different businesses. Running both multiplies working capital and management attention.
- Goodwill is a promise. Roughly NZ$394m of impairment is the gap between what was paid for and what is now expected.
- The original business may be the best one. Kathmandu grew 11.1% in FY26 once it received focus.
Readers interested in comparable Australian retail stories can browse the Australia Company Stories hub.
What happens next for KMD Brands?
The next year will decide whether KMD Brands remains a three-brand listed group. Management is guiding to higher earnings in FY27, while the board considers approaches that could lead to a takeover, a sale of Rip Curl or no transaction at all.
On the operating side, the targets are modest: sales growth of up to 2% and EBITDA of NZ$52m to NZ$55m, to be delivered through cost savings and better margins rather than expansion. Hitting them would rebuild credibility after several years of downgrades.
On the corporate side, three outcomes are plausible. A private buyer could take the whole group and separate the brands away from public scrutiny. A trade buyer could acquire Rip Curl, leaving a smaller Kathmandu-led company. Or the board could conclude that the offers undervalue a recovering business. Whatever the result, the idea that animated the 2019 deal, that a house of outdoor brands would be worth more than its rooms, has been tested and found wanting.
Frequently Asked Questions
What brands does KMD Brands own?
KMD Brands owns Kathmandu, the outdoor clothing and equipment retailer founded in New Zealand in 1987; Rip Curl, the Australian surf brand acquired in 2019; and Oboz, a US hiking footwear brand acquired in 2018. Through Rip Curl it also owns Ozmosis, a multi-brand surf retail chain in Australia.
Is Kathmandu still a New Zealand company?
Yes. KMD Brands is incorporated in New Zealand, has its head office in Christchurch and is listed on both the NZX and the ASX. Most of its sales are made outside New Zealand, chiefly in Australia, North America and Europe, and its shareholders are mainly Australasian institutions.
How much did Kathmandu pay for Rip Curl?
Kathmandu Holdings agreed in October 2019 to buy Rip Curl for A$350m, funded by new shares and debt. In FY26 the group wrote down goodwill and brand assets, largely relating to its acquisitions, by about NZ$394m after tax, which produced a statutory net loss of NZ$414.4m.
Does KMD Brands pay dividends?
Not currently. Dividends have been suspended since 2023 and none was declared for FY26. The company raised NZ$65.3m of new equity in 2026 to strengthen its balance sheet, and net debt stood at NZ$48.1m at 31 July 2026. A return to dividends would require sustained profitability.
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