Kathmandu is keeping faith with Christchurch and expanding its national distribution centre there.
Kathmandu chief financial officer Mark Todd said the company's existing centre suffered minor damage during February's earthquake.
While it was in working order after two weeks, the lease is due to expire next year. With the limited space available for the expanding company, it made sense to move to a bigger building, he said.
Yesterday it announced a 10-year deal to lease a building in a new development in Woolston.
Kathmandu has grown considerably since it moved into its centre in 2000. It then had nine stores and now has 37 across New Zealand.
Canterbury Earthquake Recovery Minister Gerry Brownlee said Kathmandu's decision to rebuild in Christchurch was a "major vote of confidence". He said there was a "real air of optimism in the region at the moment" and Kathmandu's announcement would signal that the city's future is secure and positive.
The new distribution centre will be built in the Portlink Industrial Park.
David Mortimer of Arcus Developments said the deal with Kathmandu was confidential but the site being built for the company would be worth about $8 million to $12 million once finished in May next year.
Kathmandu chief executive officer Peter Halkett said the increased warehouse space would support the expansion of the company's product range.
"As a major player in outdoor gear for travel and adventure in Australasia, Kathmandu currently has its support offices and national distribution centres in Christchurch and Melbourne.
"But with more than 100 stores across Australia and New Zealand, the company has been reviewing its future requirements.
"The board has decided to build a new facility at Woolston in Christchurch, near our head office.
"We did consider the option of an alternative warehousing facility in Auckland, but the board decided that Christchurch was a superior proposition."
Construction of the centre at the Portlink site is scheduled to begin at the end of the year and be completed by July 2012.
Kathmandu shares closed down 11c yesterday at $2.43.