The Board of Directors of KMD Brands (Group), the New Zealand-based parent of the Rip Curl, Oboz and Kathmandu brands, is the latest to commence a strategic business review, with the purpose of “delivering improved returns for shareholders.”

“KMD Brands remains focused intensely on improving the performance of its brands and strengthening the Group overall,” the company reported in its fiscal third quarter earnings release. “KMD Brands continues to see significant opportunity for performance improvement through its Next Level strategy of disciplined cost control, more focused utilization of the Group’s brand and operating capabilities to capture identified growth opportunities, and margin expansion.”

Detailed commentary on KMD Brands’ Next Level strategy for “Creating a Stronger KMD Brands” was provided in the Group’s  March 31 investor presentation.

“As updated today, substantial progress continues to be delivered against the Next Level strategy, and ongoing execution is expected to deliver improved returns for shareholders. Following the completion of KMD Brands’ recent recapitalization, the Group now has an improved capital structure to better enable the execution of that strategy.

“In parallel with the disciplined execution of the Next Level strategy, the Board has resolved to initiate a comprehensive business review to assess whether other opportunities may exist to accelerate the realization of shareholder value. The review will examine the Group’s capital structure, portfolio configuration and other value-creation opportunities. To assist KMD Brands in this process and to bring additional commercial rigor and independence to it, the Board will appoint external financial and legal advisers to lead the process; those appointments will be finalized over the coming weeks.”

KMD Brands Board Chair Philip Bowman said: “Our commitment to creating long-term value for shareholders is the Board’s clear priority. In parallel with our focus on improving KMD Brands’ operating performance, this business review is an appropriate next step at this time. The Board is committed to assessing all credible options that have the potential to deliver superior value for shareholders.”

Bowman said the Group’s day-to-day operations will continue as usual during the review, and customers, suppliers and team members should not expect any change in service or engagement.

“The Board does not intend to provide further commentary on the review until the process is complete, unless circumstances otherwise require disclosure,” he noted, “The business review is expected to be complete on or shortly before the announcement of the FY26 Annual Results in September 2026. There is no certainty that any material initiative or transaction will result from the business review, and shareholders are not required to take any action at this time.”

Next Level Update
In updating the market on the Group’s Next Level initiatives, KMD Brands specifically discussed:

  • Store Network Optimization
  • Digital Execution
  • International Reset

Store Network Optimization
KMD Brands said it continues to focus on the profitability of its store network as part of the Next Level integrated marketplace strategy, with 16 stores already closed in FY26 and additional doors targeted to close “where sustainable rent outcomes cannot be agreed with landlords.” The third Kathmandu “Next-Gen Concept Store” announced earlier in the year opened on Little Collins Street in Melbourne this month. The new Kathmandu store format “showcases the return to product innovation and seasonal brand stories, offers enhanced product assortments and a simplified in-store navigation to elevate the customer experience. “

Digital Execution
KMD Brands said it “continues to prioritize the reset of the digital business to leverage the recent Shopify implementations in all three brands to improve product storytelling, customer experience and drive conversion.” Online sales in the first nine months of its fiscal year are up 4.7 percent YOY and online sales as a  percent of total DTC sales for the Group represent 13.5 percent.

International Reset
KMD Brands said that following the reorganization of Rip Curl North America operations in the first half of its fiscal year, the North America business is expected to deliver positive EBITDA results by the end of FY26, excluding restructuring impacts. KMD Brands said, “Kathmandu remains focused on digital expansion and leveraging third-party distribution partners internationally to enable future profitable growth. “

Brent Scrimshaw, group CEO and managing director, KMD Brands, said, “It’s pleasing to see momentum building in our Next Level execution. Despite challenging broader market conditions, the Group has continued to deliver encouraging progress in Q3, balancing sales execution and gross margin expansion together with operational and cost discipline.”

  • Kathmandu sales growth delivered in the first half has continued into the third quarter, reflecting a sustained customer response to improved product-led innovation and excitement at retail through better storytelling and flow.
  • Rip Curl has remained resilient in a more volatile global trading environment and delivered meaningful gross margin improvement whilst we reset the business.

Scrimshaw suggested the quality of earnings across the Group is strengthening, supported by disciplined pricing, improved product mix and ongoing cost control.

“Nine months into the first year of execution, our Next Level transformation strategy is demonstrating that we are building a stronger, deeply connected and more resilient business, while remaining on track to achieve our medium-term targets,” he said.

Image courtesy Rip Curl/KMD Brands