KMD Brands, the ailing owner of Kathmandu, Rip Curl and Oboz, has entered advanced talks with US-based brand management giant Bluestar Alliance over a potential takeover.

The ASX-listed retailer told investors that the talks bring no promise of a deal materialising, but it has entered into an exclusivity agreement with Bluestar. This agreement will allow Bluestar to undertake due diligence prior to a potential all-share takeover.

Bluestar Alliance’s portfolio includes Dickies, Off-White, Hurley and Palm Angels.

The talks come after heavy losses on the balance sheet for KMD, which came after a long-running equity raise assisted by Goldman Sachs. Fiscal 2026 was blighted by this equity raise, a period in which KMD also declined an acquisition offer for its Rip Curl brand.

KMD has long maintained there to be “substantial potential” in its business, but told shareholders that it was open to takeover offers when the statutory loss of $333.5 million in fiscal 2026 was revealed.

The group has continued to focus on its ‘Next Level’ growth strategy through these discussions. This strategy centres on improving profitability, generating free cash flow and reducing leverage.

Discussions with Bluestar Alliance have until December 23 to materialise.

“The board has not made, and the granting of exclusivity should not be taken as, a recommendation of any transaction,” KMD said.

Shareholders have been told not to do anything at this stage.