Kathmandu to open 18 new stores in NZ

Kathmandu chief executive Peter Halkett. Photo / Richard Robinson.

Kathmandu, the outdoor lifestyle retailer based in Christchurch, has signalled 18 further store openings in New Zealand as it launched a sale of shares today from Australia.

The 200 million shares being sold will be listed in Australia and New Zealand. The final price will be set on November 12 after a bookbuild process with institutional shareholders.

An indicative range of A$1.65 to A$1.90 or $2.01 to $2.32 was given today.

"We haven't forgotten our New Zealand investors," chief executive Peter Halkett said.

Private equity investors Goldman Sachs JBWere and Quadrant Capital, who bought the company off founder Jan Cameron, will either sell down to 15 per cent or exit, depending on demand.

The float promoters say the current owners opened 36 new stores in better locations and invested in information technology over more than three years of ownership.

The company is being marketed as a good buy for investors because it sells 95 per cent of its own branded products, taking a wholesale and retail margin. The stores sell 60 per cent clothing and 40 per cent equipment.

Executives admitted 60 per cent of goods are sold on sale, but said "the sale is part of our DNA".

Kathmandu believes its products are attractive to a broad range of people with active lifestyles, including kids and what the company called older outdoor enthusiasts.

The growth story is centred on plans for new stores in Australia and New Zealand. A total of 70 new stores are planned, of which 18 are in New Zealand.

"There is still scope for growth in New Zealand particularly because we are a lifestyle brand," Mr Halkett said.

The company is not concentrating on expanding in the UK, but is keeping a bigger roll-out there open as an option.

It is discouraging comparison with the float in Australia of department store Myer, saying a department store was a different business to a vertically integrated retailer of lifestyle products.

Kathmandu argues its vertical model allows it to control the customer experience.

Chairman James Strong is known to New Zealanders as a former boss of Dominion Breweries and is an outdoor enthusiast, having climbed in a number of locations, including New Zealand.

Goldman Sachs JBWere and Macquarie Group Ltd are the lead managers for Kathmandu's offer.

The company will have a market capitalisation between $402m and $463m. The price is between 13 times and 15 times earnings and the dividend payout ratio is 55 per cent.

The retail offer runs between October 27 and November 6 with an institutional bookbuild on November 10 to November 11.

- NZPA