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Rip Curl, Kathmandu owner in takeover talks amid retail struggles
The Australian owner of some of the nation's most iconic outdoor retail brands has revealed it is engaging with a US streetwear giant.
- KMD Brands, the parent company of iconic Aussie brands Kathmandu and Rip Curl, is engaging in takeover talks with a US management fund.
- In a note to investors, KMD Brands said it had received a “number of approaches” to sell the business.
- The talks follow months of financial pressure, with KMD Brands closing 16 stores as part of efforts to improve profitability.
The Australian owner of some of the nation’s most iconic outdoor retail brands has revealed it is engaging with a US streetwear giant to potentially sell the business.
KMD Brands, the parent company of brands such as Rip Curl and Kathmandu, told shareholders it had received a “number of approaches” after conducting a business review, including the option of selling the business.
Investors were told that after assessing the bids, KMD Brands engaged in an exclusivity contract with New York-based Bluestar Alliance LLC.
Bluestar manages several well-known streetwear and surf brands, including Dickies, Hurley, Off-White and Kensie.
The potential sale comes amid mounting pressure on Australian retailers, with household budgets squeezed by higher living costs and interest rates. Major chains including Myer and David Jones have struggled with weaker consumer demand.
KMD Brands said the exclusivity agreement is only for Bluestar to conduct its due diligence, and does not guarantee a sale.
“There is no certainty at this time that this process will result in receipt of a binding proposal, or that any transaction will ultimately be consummated,” the board said.
“The Board has not made, and the granting of exclusivity should not be taken as, a recommendation of any transaction.
“Accordingly, shareholders do not need to take any action at this time.”
Talks come amid financial struggles
The talks come as KMD Brands looks to restructure the business towards more profitable margins.
A combination of factors, including the decline of surf culture among mainstream consumers, led KMD Brands to close 16 stores in the past 12 months.
In late May, it signalled it may have to close more.
“With 16 stores already closed in FY26 and additional doors targeted to close where sustainable rent outcomes cannot be agreed with landlords,” the board reported.
“Stores continue to be evaluated against profitability thresholds along with clear criteria to deliver optimum performance for the store portfolio, including geographic alignment with strategy, presence in attractive shopping locations and alignment with brand store segmentation and category.”
Phillip Bowman, who was installed as chair of the board in early May, said the main goal was providing maximum returns for shareholders.
“Our commitment to creating long-term value for shareholders is the Board’s clear priority,” he said.
“In parallel with our focus on improving KMD Brands’ operating performance, this business review is an appropriate next step at this time.
“The Board is committed to assessing all credible options that have the potential to deliver superior value for shareholders.”