Kathmandu Holdings Ltd (ASX: KMD), the outdoor activities equipment and apparel retailer wants to use its strong brand to increase online sales, which make up about 4% of total sales currently, its aiming for above 10% over the next two years.
The new chairman, David Kirk, is a fitting one since he is the chairman of Trade Me Group Ltd (ASX: TME), the largest online classifieds portal in New Zealand. The wealth of experience from that business, as well as from his time as CEO at Fairfax Media Limited (ASX: FXJ), will make the online development even more promising.
This change comes at a time when creating an international presence is a strategy for the retailer. It has taken its first steps in the UK, which it sees as a test bed to develop brand awareness and to drive its online ordering by getting closer to the aspirational buyer who loves the brand.
This business model seems to be working with other retailers like David Jones Limited (ASX: DJS) and Myer Holdings Ltd (ASX: MYR), in that the online retail side is actually incentivising online shoppers to visit stores more, and their average spend can be higher when they do come.
Super Retail Group Ltd (ASX: SUL), owner of such brands as Supercheap Auto, BCF and Rebel Sports, is investing strongly into its multi-channel promotions and sales, and creating a customer loyalty club membership base that even helps direct promotional sales based on what customers want or regularly buy.
Kathmandu released a trading update before Christmas covering the 16 weeks up to 17 November, reporting group sales up 0.9% on the prior corresponding period, with same-store sales for Australia and New Zealand up over 3%. It hasn't reported its holiday season sales, so all eyes will be on that announcement when it comes.
Electronics retailer JB Hi-Fi Limited (ASX: JBH) reported a 10% rise in half-year NPAT on a 6.8% gain in sales, so there is activity in the retail sector, but this month more retailers will be showing just how merry of a Christmas it actually was.
Foolish takeaway
Retail business investors are well aware how quickly the industry conditions can change, but good execution comes from good planning. The changes that Kathmandu is implementing now offer good opportunities, and competent management will guide it.
