SYDNEY: New Zealand outdoor clothing maker Kathmandu Holdings said that it will buy Rip Curl Group for A$350 million ($236 million) in a deal that leaves the last of Australia’s big three surf brands under overseas control.
Kathmandu said that the acquisition would make it a NZ$1 billion ($625 million) company, expand its presence in Europe and North America, and give it a “seasonal balance” between Rip Curl’s summer/beach focus and Kathmandu’s winter and outdoor offerings.
Started in 1969 by surfer friends Brian Singer and Douglas Warbrick, and still based at popular Bells Beach in Victoria, Rip Curl with local rivals Billabong and Quiksilver ranked among the world’s biggest brands for sales of wetsuits, boardshorts and popular branded beach T shirts.
The sale closes a chapter on Australia’s once central role in surfwear culture. US private equity firm Oaktree Capital gained control of Billabong and Quiksilver over the past three years following troubled efforts by the companies to expand globally.
Singer and Warbrick will gain shares in Kathmandu as will Rip Curl CEO Michael Daly, who will continue in his role and report to Kathmandu CEO Xavier Simonet, the companies said.
Clothing retailers around the world are paring back brick-and-mortar operations to compete with online giants such as Britain’s ASOS and low-cost “fast fashion” chains such as Zara, owned by Spain’s Industria de Diseno Textil.
The fiercer competition has coincided with economic headwinds which have prompted central banks to cut lending rates.
“We are seeing rates being cut around the world, which means the cost of capital for foreign entities is getting much cheaper ... so we’ll probably see more M&A because of that,” said Daniel Cuthbertson, managing director of Value Point Asset Management.
After buying Rip Curl, Kathmandu said that it will have 341 of its own stores around the world, plus 254 licensed outlets in Australia, New Zealand, North America, Europe, Southeast Asia and Brazil.