Rip Curl rides post-lockdown sales surge
Just under a year ago, Australian surfing brand Rip Curl, one of the premier names in the sector, was bought by New Zealand outdoors apparel and equipment group Kathmandu. The acquisition took place just before the global crisis caused by the Covid-19 epidemic hit. In the aftermath of an acquisition and a pandemic, how is Rip Curl doing now?
The first hints of an answer are offered by the Kathmandu group’s annual results for the non-standard financial year closed at the end of July, which were published last week. From November 2019 to July 2020, Rip Curl generated a revenue of nearly NZD316 million (€177 million), equivalent to a slump of over 17% compared to the same period a year earlier. The group has estimated that the revenue loss caused by the pandemic is in the region of NZD70 million. EBITDA however was positive, at NZD11.7 million, and this despite the additional costs triggered by the brand’s integration within the Kathmandu group. Rip Curl notably recorded a slump in its business with multibrand retailers, after Covid-19 affected the Fall/Winter sales season in the northern hemisphere.
On the other hand, the Kathmandu group spotted some encouraging signs, especially in monobrand stores. “Sales growth at comparable doors has been stronger after the end of lockdown (rising by 14.4%) than before it was introduced (when it was up by 2.6%), thanks to economy-boosting [governmental] measures and an increase in surfing opportunities while consumers worked from home,” said the Kathmandu group in the report for the 2019-20 financial year. “As the interest in surfing grew, sales increased by 17.7% in Australia and by 20.6% in Europe. In the USA too, comparable sales improved after the lockdown was lifted, growing by 12.3%, despite the fact that stores in Hawaii, owing to travelling restrictions, experienced a severe shortfall, losing 73.3%,” added Kathmandu.
The period in question also provided a springboard for Rip Curl's online sales, which increased by 52% over the previous year. They now account for over 10% of the brand’s direct-to-consumer sales.
In the 2019-20 financial year, sales for the Kathmandu group's eponymous retail chain fell by 9.7% to NZD426 million, while those for footwear brand Oboz lost 15.2%, slumping to NZD37.8 million.
Altogether, the group led by Xavier Simonet, whose main stronghold is the Pacific region, generated a revenue of NZD801 million (€450 million) in 2019-20, with EBITDA worth NZD83.4 million.
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