KMD Brands, parent of outdoor brand Kathmandu and Rip Curl, is planning to reduce its store count as part of a transformation strategy aimed at driving growth and profitability.

The plan, announced during the company’s Investor Day, includes a minimum $25 million cost reset, which will involve the closure of at least 21 stores and a recently commenced organisational restructure. More stores could be closed pending the outcome of a network portfolio review.

The company will also focus on improving its existing network by adding three Kathmandu ‘concept stores of the future’ in ANZ this year to drive relevant consumer experiences and stronger brand expression.

Other key priorities are product innovation – including establishing product ‘Centres of Excellence’ at Rip Curl headquarters in Torquay, new digital and data intelligence tools, and more investment in e-commerce.

Brent Scrimshaw, who was appointed CEO in March, said the plan, named Next Level, marks the beginning of a multi-year transformation and is designed to align the group behind a brand and product-led customer-centric growth agenda. 

“Core to our strategy is a clear integrated marketplace vision for each of our brands that aligns consumer, product and store format in each geography,” he continued.

“We believe KMD Brands is materially undervalued by the market,” added David Kirk, chairman of KMD.

“Over the last 18 months, we have deliberately made significant executive team changes to enhance the core capabilities of the group. The board is fully aligned behind the Next Level strategy and is confident in the group’s ability to self-fund key initiatives and deliver increasing value for shareholders,” he said.

KMD currently operates nearly 330 stores globally and sells its products through thousands of third-party outlets.

In a recent trading update, the company reported a 0.5 decline in sales for the 10 months ended May, with Rip Curl sales up 0.4 per cent and Kathmandu down 1 per cent.