Rip Curl and Kathmandu’s struggling owner KMD Brands has left the door open for potential takeover offers after suffering a heavy full-year loss.
KMD — which is also behind hiking boots label Oboz — has already rejected a proposal from a US surfwear company to demerge the Rip Curl business, saying the move would create no value for investors.
Stokehouse Unlimited had proposed KMD spin Rip Curl into a separate NZX and ASX-listed company and merge it with the California-based business.
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Earlier this year, KMD chair Philip Bowman launched a review into the retailer, which opened up a potential break-up of the business.
Unveiling its full-year results on Wednesday, Mr Bowman said while the group remained focused on improving profitability, it has not closed the door on takeover talks.
“In concluding the business review, the board has considered a range of approaches from interested parties,” Mr Bowman said.
“We believe it is appropriate to continue discussions with a small number of parties to determine whether any opportunity has the potential to deliver superior value for shareholders.
“These discussions remain preliminary in nature and there is no certainty that any proposal will lead to a transaction.”
KMD, which is also listed in New Zealand, said it would divest Rip Curl’s wetsuit factory in Thailand following the review of the business.
The group also tried to offload Rip Curl’s multi-brand retail chain Ozmosis, but said no proposal emerged that offered great value.
KMD will continue to slash costs through the “offshoring of select group shared services”.
KMD plunged to a net loss of $NZ414.4 million ($332.8m) in the year to July 31, which included a $NZ394m post-tax impairment of intangible assets relating to all three brands and restructuring charges.
Group sales jumped 6.5 per cent to $NZ1.05b in 2026, with Kathmandu the standout performer for the group. The outdoor clothing brand recorded an 11.1 per cent increase in sales.
KMD said the Kathmandu result was achieved despite having fewer stores than the prior year.
Sales at Rip Curl and Oboz both increased nearly 4 per cent. KMD expects group revenue this financial year to hit between $NZ1.055b and $NZ1.075b.
Earlier this year, KMD was forced to raise funds at a deep discount in an effort to stabilise its money-losing business after lenders baulked at extending the retailer more financing.
“The progress achieved during FY26 reinforces our belief that there is substantial potential within the business,” KMD chief executive Brent Scrimshaw said on Wednesday.
“We have strengthened our foundations, improved our earnings profile and created a more focused organisation. While there is more work to do, we enter FY27 with clear priorities and growing momentum.”
For the first seven weeks of the new financial year, same-stores sales at Kathmandu was up 7.4 per cent compared with the same period last year, and up one per cent at Rip Curl.
Sales growth at Rip Curl’s own stores was even stronger, up 4 per cent.
So far this year, KMD shares have plunged 60 per cent to $1.54.
