Rip Curl Store Closures: Major Overhaul – Swellnet
- Just one week after Rip curl initiated workforce reductions in North America, its parent company, KMD Brands, announced significant changes to its Australian operations on September 4, 2024.
- KMD Brands aims to improve flagging sales and bolster its declining share price through this restructuring.
- The store closures are projected to generate $25 million in cost savings and reflect a strategic shift towards online commerce.
Rip Curl and Kathmandu Parent Company Announces restructuring, Store closures
Company-Wide Changes Follow North American Downsizing
Just one week after Rip curl initiated workforce reductions in North America, its parent company, KMD Brands, announced significant changes to its Australian operations on September 4, 2024. These changes include the planned closure of at least 21 stores across the KMD network,encompassing both Rip Curl and Kathmandu.
Financial Pressures Drive Restructuring
KMD Brands aims to improve flagging sales and bolster its declining share price through this restructuring. Shares reached a record low of $0.21 in late August 2024,representing a 50% decrease in value over the past year and a substantial drop from the $2.00 price when KMD acquired Rip Curl in late 2019.
Shift Towards Online Commerce and Cost reduction
The store closures are projected to generate $25 million in cost savings and reflect a strategic shift towards online commerce. KMD Brands intends to enhance the digital experience for customers and accelerate the rollout of its e-commerce platform across its brands.
“We are also accelerating our ecommerce platform rollout across our brands with investment in more effective digital marketing,” stated Brett Scrimshaw, KMD’s chief executive.
Kathmandu to Launch New Store Concepts
While unprofitable stores will be closed, KMD Brands plans to revitalize other locations. The Kathmandu brand will introduce “stores of the future” across Australia and New Zealand before Christmas 2024.
KMD Chairman expresses Confidence
KMD Chairman David Kirk asserted that the company is currently “materially undervalued” by the market. He highlighted recent executive team changes designed to strengthen the group’s core capabilities.
“Over the last 18 months we have deliberately made significant executive team changes to enhance the core capabilities of the group,” Kirk said. “The board is fully aligned…and is confident in the group’s ability to self-fund key initiatives and deliver increasing value for shareholders.”
Rip Curl Store Closures: Details Remain Unclear
As of september 5, 2024, the specific Rip Curl stores targeted for closure have not yet been announced.