KMD Brands Unveils Bold $25M Cost-Cut Plan to Fuel Growth Revival

Strategic Reset Amid Challenging Market Conditions

KMD Brands, the parent company of outdoor lifestyle labels Rip Curl, Kathmandu, and Oboz Footwear, has unveiled a decisive turnaround plan dubbed the 'Next Level' strategy. This initiative comes as the company seeks to sharpen its competitive edge and restore sustainable profitability in a market marked by volatility and rising costs.

The strategy centers on a dual approach, aggressively cutting legacy costs by approximately $25 million while simultaneously investing around $15 million in growth initiatives. These moves aim to recalibrate the cost base and fuel brand-led expansion, particularly through product innovation and digital acceleration.

Leadership Changes and Operational Focus

Over the past 18 months, KMD Brands has restructured its executive team to bring fresh capabilities aligned with its strategic ambitions. New appointments include CEOs for Rip Curl and Kathmandu, alongside a new Group CFO and other key roles focused on legal, ESG, commercial, and digital expertise. This leadership refresh is designed to drive a culture of accountability, consumer obsession, and operational discipline.

Operationally, the company is streamlining its product assortments, enhancing demand and supply planning, and prioritizing high-margin digital sales channels. Store fleet rationalization has identified 15 stores for closure, reflecting a shift towards profitability-first retail execution and a more agile cost structure.

Financial Guardrails and Growth Ambitions

KMD Brands has set clear financial guardrails to guide its turnaround, targeting a gross margin near 60%, operating expenses below 50% of sales, EBITDA exceeding 10%, and working capital under 16% of sales. The company also aims to maintain a conservative net debt to EBITDA ratio between 0.0x and 0.5x, with capital expenditure capped at 3% of sales over the medium term.

Dividend policy remains disciplined, with a payout ratio of 50-70% of underlying net profit after tax, and potential for special dividends or buybacks if leverage targets are met. The group plans half-yearly progress updates to provide transparency on execution and financial performance.

Brand-Specific Strategies and Market Positioning

Each brand within the portfolio is pursuing tailored strategies to capture growth. Rip Curl is focusing on next-generation consumer connection and digital-led marketplace integration. Kathmandu aims to reinforce market leadership through distinctive product innovation and purposeful channel execution. Oboz Footwear is diversifying channels and elevating its fast trail category to connect with high-value consumers.

International expansion remains a priority but with a profitability-first mindset, leveraging partnerships and a repeatable low-cost playbook to test and scale new markets. This measured approach reflects a cautious stance amid ongoing tariff complexities and competitive pressures.

Outlook and Market Implications

KMD Brands’ 'Next Level' strategy signals a clear commitment to operational discipline and brand-driven growth. While the path to turnaround involves risks, particularly execution and market volatility, the company’s structured financial targets and leadership changes provide a framework for renewed investor confidence. The coming months will be critical as KMD balances cost management with growth investments to regain momentum.