Kathmandu restructure could cut 10% of head office employees
Kathmandu will closely review costs and structures in recognition of a significant reduction in profitability in the 2015 financial year.
Kathmandu Holdings [NZX: KMD], the outdoor clothing and equipment chain facing a hostile takeover bid, has announced an immediate review of its head office structure which could cut up to 10 percent of top management employees in Australia and New Zealand.
Kathmandu will closely review costs and structures in recognition of a significant reduction in profitability in the 2015 financial year, compared to previous years, and the company was taking decisive action to address the recent underperformance in sales and profit and was looking to all areas of the business, chief executive Xavier Simonet said in a statement. The company's shares jumped up before the announcement and are now up 9.7 percent to $1.70.
"I am confident the outcome of the review will enable us to invest in our growth strategies and deliver improved results for our shareholders," Simonet said.
The move follows a takeover bid last month from Briscoe Group which was rejected by the board because it undervalued the chain. Grant Samuel's independent assessment of the offer valued the shares in a range of $2.10 to $2.41 above the implied $1.80 a share offer. Briscoe announced in early July it had built up a 19.99 percent stake in the retailer.
The Briscoe bid remains open on the market until Sept. 17, although its founding and major shareholder Rod Duke could opt to extend the offer though he has to give notice of that two weeks before.
Kathmandu had already identified a number of areas to improve performance including optimising the existing store network, cost reductions across the business, increased focus on innovation and distinctive products, activation of Summit Club members, improved digital and social media communications, and identifying international opportunities through a "capital-light model" and leveraging online.
The review is expected to be completed by the end of September.
(BusinessDesk)
Fiona Rotherham
Wed, 26 Aug 2015
Wed, 26 Aug 2015
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Kathmandu restructure could cut 10% of head office employees
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