David Kirk: KMD Brands Chairman on the closure of 21 stores to try save costs

Another tough week for brick and mortar retail. 

Outdoor goods retailer KMD Brands, who owns the likes of Kathmandu and Rip Curl, has announced the closure of 21 stores across its network. 

It’s making the move in an effort to turn around struggling sales and find $25 million in cost savings. 

Chairman David Kirk told Mike Hosking that it’s a tough environment for all businesses, but discretionary retail is being hit hard. 

He says people have to buy food, and if a kitchen appliance breaks you have to replace it, but people don’t have to go out and buy an insulation jacket, or a raincoat, or a wetsuit. 

“In difficult times, people hang onto their money.” 

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Episode Transcript

Speaker 1 (00:00):
It's been a week where bricks and mortars reminded us

(00:02):
of the grind and retail fortune favors. They were closing
until Garage Project came along and saved it. Last week
kitchen things hit the wall. Of course, Smith's City in
the hands of the accountants now and we've got Kadim
KMD brands. They're looking to close twenty one stores. David
Kirk's the chairman of KMD and is with us, David Morning,
I like Catman, Do Rip, Curl and Obos. Is there
any delineation between the three or all three struggling?

Speaker 2 (00:26):
They're all, they're all. They're all tough environment for all companies.
Obos is mostly exposed to the US, it's a US company,
and the other two are exposed to Australasian domestic spending
and consumer spending. So yeah, it's a tough environment for
all of them.

Speaker 1 (00:41):
Is spending tough everywhere in the world or everywhere you are,
or is New Zealand and outlier.

Speaker 2 (00:48):
No, it's tough everywhere. This is the greatest uncertainty actually
is in the United States. Things are it's all over
the place over there, and.

Speaker 3 (00:57):
New Zealander is tough and pop in New Zealand a
little bit tougher than Australia.

Speaker 2 (01:00):
I think there's a little bit more optimism coming through
in Australia, but I'm sure we'll get there.

Speaker 1 (01:05):
In you young, what's your sense of your model the
way you do business versus the economy in other words,
it affects everyone.

Speaker 3 (01:13):
Yeah, I think that's right.

Speaker 2 (01:14):
I mean we are a people talk about as discretionary retail.
In other words, people can decide whether they buy or
they don't, and when there, when there, you know, wallets
are a bit tight and straight to being high for
quite a period that's been difficult for people. Then they
don't exercise their discretion and buy the sorts of products
that we sell. So it does depend on which part
of the market you're in. People have to buy food,

(01:36):
you know, if your kitchen appliants breaks, you have to
have to replace it, but they really don't have to
go out and buy an insulation jacket or a raincoat
or a wetsuit. So we are genuinely discretionary and in
difficult times people hang on to their money.

Speaker 1 (01:51):
What about the seasonality when you have a bad winter,
bad summer, etc. That's beyond your control? Is that real?

Speaker 3 (01:57):
Yeah? That is real.

Speaker 2 (01:58):
That is definitely real, but we try not to focus
on that as something that's that we make excuses for.
But we did have a very warm lead into winter
this year and then we had a good, decent cold winter.
So it does make a big difference, particularly for cat
Mand because you know, we provide gear that's used in
cold weather or in rainy weather, and similarly for to

(02:19):
some extent, for Rip Curl. You know, people don't get
to the beach if it's pouring with range, so they
don't need to replace their wetsuit or buy some swimwear.

Speaker 1 (02:27):
I was reading an article on AU Finance this morning
that called you an iconic ossie retailer. What happened there?

Speaker 2 (02:37):
You mean calling called candy brands and iconic? Yeah, well,
I think the business is much bigger in Australia now
than it is in New Zealand.

Speaker 1 (02:42):
Form to David christ Juge, for goodness sake, yes.

Speaker 3 (02:45):
CapMan Do. But Mike, there's three brands now.

Speaker 2 (02:48):
There's Catman Do, There's Rep Curl and Obo's And that's
actually really important because we get that seasonal diversification.

Speaker 3 (02:55):
We've got summer around winter.

Speaker 1 (02:57):
You excited about the rugby, You buying into this fifty
years as Eden Park. Oh my god, we're not as
good as we used to be. The South African is
going to kill us thing.

Speaker 3 (03:06):
Well, I don't buy the last part of that.

Speaker 2 (03:08):
I think it's pretty exciting though, to have a long
record to defend at Eden Park, and I think that
creates for a lot of interest and I'm very brought
into creating interests for rugby. I think we're gonna be
killed at all. I think it's gonna be a really interesting
game and I think we had a good chance of winning.

Speaker 1 (03:26):
Good on, You're nice to talk to. You appreciate it,
David Kirk, chairman on these days of km D brands,
according to au Financer and Iconic Hosy retailer. For more
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