Introduction
Breaking news: stock price plunges 50%! An Australian retail giant has announced a major strategic shake-up, confirming the closure of 21 stores. The reasons behind the drastic move have now come to light.

Australia’s Retail Giant to Shut 21 Stores
Amid soaring inflation and weakening consumer demand, Australia’s retail sector is undergoing significant restructuring. Recently, KMD Brands, the parent company of popular outdoor clothing label Kathmandu, surfwear brand Rip Curl, and hiking boot brand Oboz, confirmed it will close 21 stores.

Listed on the Australian Securities Exchange, KMD operates more than 300 stores worldwide across its three brands. However, the group admitted that for the financial year ending May 2025, overall sales slipped 0.5%, while its share price has crashed by more than 50% over the past 12 months, now trading at just 22 cents.

Financial results show the group continues to face severe pressure. For the six months ending January 31, the company recorded a loss of NZ$20.7 million (about A$18.6 million), a slight improvement from the NZ$38.3 million loss in the same period last year, but still weak enough to worry investors. Earlier this year, the company was forced to renegotiate financial covenants with creditors over NZ$70 million in debt.

At Thursday’s KMD Investor Day, Group CEO Brent Scrimshaw unveiled a new “Next Level” transformation strategy. He confirmed the immediate closure of at least 21 underperforming stores, warning that more closures could follow once a full network review is completed. The shutdowns will affect both Kathmandu and Rip Curl’s global store networks.

Interestingly, even while scaling back, the group still plans to expand in key regions. New Rip Curl stores will open along the Mediterranean coast in Italy, Spain, and France, while three new Kathmandu concept stores are set to launch in Australia and New Zealand later this year.

Scrimshaw explained that since taking on the CEO role, he has spent significant time visiting offices and regional operations, listening to employees and retail partners while assessing the business. He stressed that the brands’ full potential has not yet been unlocked, pointing to a lack of innovation and differentiation in products, saying much of the range has become repetitive and generic. The “Next Level” restructuring plan will focus on revitalizing product innovation, accelerating speed-to-market, and improving design and style.

Board Chairman David Kirk revealed that in the past 18 months, the group has reshuffled over 10 senior leadership roles to strengthen its core capabilities. He affirmed that the board fully supports the Next Level strategy and believes KMD has the capacity to self-fund critical initiatives while delivering sustainable value growth for shareholders.

Conclusion
The road to transformation is never easy. Whether KMD’s self-reinvention can restore market confidence remains uncertain. Time will tell.

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