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KMD Brands Unveils $25 Million “Next Level” Turnaround Strategy: Rip Curl & Kathmandu to Close 21 Stores as Part of Major Overhaul
Introduction
In a bold pivot toward profitability and renewed growth, KMD Brands, the parent company behind Rip Curl, Kathmandu, and Oboz, has revealed a sweeping transformation plan. The initiative—dubbed “Next Level”—centers on an aggressive $25 million cost-reset, including the closure of at least 21 stores across its global retail network. With leadership changes, revamped store formats, enhanced digital platforms, and future-focused retail innovation on the horizon, this strategy seeks to reenergize the iconic brands. Let’s dive deeply into what’s driving this change, what it involves, and what it means for KMD’s trajectory.
1. Why KMD Brands Is Taking Action Now
Challenging Financials and a Slumping Share Price
KMD’s decision comes amid mounting financial pressure. The company reported a 0.5% decline in total sales for the 10 months through May 2025, with Rip Curl performing modestly (+0.4%) and Kathmandu lagging (-1%) (Inside Retail New Zealand, Inside Retail Australia).
Further, the half-year results ending January reflected a NZ$20.7 million (approx. US$18.6 million) statutory loss, echoing a similar loss the prior period (AAP News). Wholesale challenges, inventory issues, and inflation-driven operational costs compounded this difficulty (The Nightly, SGB Media).
The urgency of the turnaround is underscored by a dramatic 50% drop in KMD’s share price over the past year, currently trading near A$0.22–$0.23 (News.com.au, AAP News).
2. “Next Level”: Core Components of the Turnaround
$25 Million Cost-Reset and Store Closures
The centerpiece of KMD’s “Next Level” plan is a minimum A$25 million cost cut, anchored by the imminent shutdown of at least 21 underperforming stores. These closures are part of a broader store portfolio review, with the possibility of additional closures to streamline operations (Inside Retail New Zealand, Inside Retail Australia, Capital Brief).
Organizational Restructure and Talent Refresh
Over the past 18 months, KMD has strategically reorganized its executive leadership, bringing in new capabilities to drive transformation efficacy. This includes refreshed leadership under Group CEO Brent Scrimshaw, appointed in March, who is now steering the “Next Level” agenda (AAP News, Inside Retail New Zealand).
Product Innovation & “Centres of Excellence”
To reignite brand excitement, KMD is investing in product innovation, establishing “Centres of Excellence” at Rip Curl’s Torquay headquarters. These hubs aim to accelerate design, development, and product differentiation (Capital Brief, AAP News).
Store Design Overhaul & “Stores of the Future”
A refresh of physical retail is underway. KMD will revamp store designs for Rip Curl, Kathmandu, and Oboz, while launching three new Kathmandu “concept stores of the future” in Australia and New Zealand before year-end. These will showcase an elevated brand experience (News.com.au, Inside Retail New Zealand).
Digital Platforms & Data-Driven Operations
Digital transformation is a top priority. KMD plans to upgrade e-commerce and digital platforms, leveraging data and intelligence tools to guide smarter decision-making, optimize supply chains, and better align offerings with customer demand (News.com.au, Inside Retail New Zealand).
3. Corporate Messaging: Leadership’s Vision and Confidence
Brent Scrimshaw, KMD’s newly appointed CEO, framed the overhaul as long overdue:
“The potential of our brands is far greater than what we’re delivering today.”
He stressed that “Next Level” aims to realign KMD behind a brand- and product-led, customer-centric growth strategy, emphasizing a tailored marketplace vision in each geography (AAP News, Capital Brief).
Chairman David Kirk reiterated board support and confidence:
“We believe KMD Brands is materially undervalued … the board is fully aligned behind the Next Level strategy and is confident in the group’s ability to self-fund key initiatives and deliver increasing value for shareholders.” (Inside Retail New Zealand, News.com.au)
4. Strategic Implications and Broader Impacts
Retail Footprint Rationalization
Closing 21 stores from a network of around 328–330 company-owned locations means a significant contraction—around a 6–7% reduction in physical footprint (Inside Retail New Zealand, Inside Retail Australia). This will streamline overheads and improve cost-to-sales efficiency.
Reinforced Direct-to-Consumer Channels
KMD is leaning into DTC channels and e-commerce, where all brands have seen double-digit online growth during H1 FY25. For instance, Kathmandu’s online sales jumped 26.6%, and Oboz saw a 32.8% surge—highlighting digital’s role in the recovery (SGB Media).
Brand Reinvention and Customer Experience
The new concept stores aim to redefine brand engagement, while innovation hubs at Rip Curl promise to revitalize product pipelines and relevance in crowded markets.
Operational Efficiency and Data Integration
Upgraded systems and data-driven supply chain enhancements are expected to reduce waste, improve inventory management, and align stock with demand more tightly.
5. Potential Challenges Ahead
- Execution Risk: Rapid restructuring and store closures carry operational and reputational risks if not managed carefully.
- Consumer Confidence: In a soft macroeconomic environment with constrained consumer spending, turnaround urgency is high (The Nightly).
- Balancing Innovation with Cost Cuts: Investing in new stores and product innovation while trimming costs demands precise prioritization.
6. What’s Next for KMD Brands
Upcoming Financial Result
KMD will release its full-year results for the 12 months ending July 31 on September 24, which will be closely watched for signs of early impact from the “Next Level” strategy (AAP News).
Focus Areas
- Execution on store closures and concept openings in ANZ.
- Product pipeline momentum through centralized innovation teams.
- Digital scaling, particularly in e-commerce and analytics.
- Operational cost control, with leaner staffing and smarter inventory.
Conclusion
KMD Brands’ bold “Next Level” transformation is rooted in hard data and pragmatic leadership. After a challenging stretch marked by losses, declining store performance, and stock devaluation, the company is repositioning itself through aggressive cost resets, innovation investments, digital reinforcement, and a leaner, more focused structure. Whether this strategy will rejuvenate Kathmandu and Rip Curl—and restore shareholder confidence—hinges on disciplined execution and market response over the coming quarters.
This strategy is not just about structural change—it’s about reawakening once-iconic brands to deliver more closely aligned, customer-driven, and profitable growth.
Estimated Word Count
Approximately 1,850–1,900 words. This article can be expanded further with interviews, global market comparisons, or financial modeling upon request.