, then merging it into a new surf and action sports group. KMD declined with a firm answer from the board. The question, however, lingers. Rip Curl was acquired by KMD in 2019 as part of a diversification strategy, balancing Kathmandu’s winter bias with a beach-and-surf-led brand and extending global reach through wholesale. If that rationale held, then the argument that it can now be challenged suggests the pairing is no longer delivering what it once promised. The Australian playbook Australia has seen its share of demergers, and the results have varied. When Wesfarmers spun out Coles Group in 2018, shareholders received one Coles share for every Wesfarmers share, with Wesfarmers retaining a 15 per cent stake. The logic was explicit in repositioning the portfolio, thus allowing both businesses to pursue their own strategies. Since the split, Coles has performed well as a major supermarket operator, with a stable share price and consistent dividends, while Wesfarmers has benefited from a clearer strategic focus. A similar argument applied to Woolworths Group’s 2021 separation of Endeavour Group, in which the company said the move would create “two independent corporate groups” and allow Endeavour to pursue its own growth path with access to capital. Post-demerger, Endeavour has grown its share in the retail liquor and hospitality markets, while Woolworths has prioritised its core grocery operations. In each case, separation was framed as refinement and led to stronger independent performance. At their best, demergers are about clarity. Once a business stands alone, decisions that were once diffused across a group become more direct, more accountable and harder to defer. As Vicki Leavy, general manager of JMK Retail, put it, “things that were once ‘in the background’ suddenly become very visible on the P&L.” When US apparel company VF Corporation demerged Kontoor Brands in 2019, the new entity emphasised its focus on Wrangler and Lee. In its FY2025 results, Kontoor reported adjusted operating income of US$468 million, up 23 per cent year on year, with chief executive Scott Baxter describing it as a transformational year driven by disciplined execution; in that instance, simplicity worked. When a demerger exposes the cracks Separation can just as easily expose weaknesses; taking scale, while creating efficiency, it can also absorb volatility. Cases like Asciano’s split from Toll show how debt and the costs of standing alone can weigh heavily on performance. In the US, the cautionary tale is even starker. After Sears Holdings’ demerger from Lands’ End in 2014, Reuters reported that the parent was already grappling with declining sales and store closures, suggesting that independence did not resolve the decline but rather exacerbated it.  Rip Curl remains globally recognised, with a wholesale footprint across North America and Europe and a clear identity in surf and beach culture. That recognition is why the proposal held weight, because Rip Curl is unequivocally distinct. The Stokehouse approach suggested that distinction might be better expressed within a more focused surf portfolio rather than a broader outdoor group. Kirk was certain enough to reject the proposal, and his assessment was clear and, for now, decisive, but decisions like that rarely settle the question entirely. Once separation has been considered, the portfolio is tested on whether each part can stand more convincingly on its own.