👉 Background: KMD Brands is the company behind Kathmandu, Rip Curl and US hiking boot maker Oboz. It was founded in 1987 in New Zealand, but has grown into a global retailer with over 300 stores. The last couple of years have been rough for KMD Brands - rougher than a hike up Mt. Everest in a Kathmandu jacket.

‍👉 What happened: Now, KMD has reported a full-year loss for the 12 months to July 31 of more than $93m NZD, compared with a loss of just over $48m NZD in 2024. In fact, only one of its three divisions, Rip Curl, was profitable for the year. So now, KMD has a big focus on cutting its costs and getting back to profitability.  by closing at least 21 underperforming stores to stop the bleeding.

‍👉 What else: Despite the greenshoots in the first 7 weeks of this new financial year, it hasn’t stopped some of KMD’s biggest investors to push for a divestment of KMD's non-core assets. But KMD is holding tight…for now.

‍What's the key learning?

‍💡Divestment is when a company sells off parts of its business that aren’t central to its main goals or operations, to free up cash and reduce debt.

💡Divestment helps refocus management attention on the most profitable areas. In KMD’s case, some shareholders argue that it needs to cut the brands that are “non-core” distractions (think: Oboz and KMD's wetsuit factory in Thailand). By selling them, KMD could pay down debt and focus on Kathmandu and Rip Curl - the brands that customers know best.

💡Successful divestments can sharpen a company’s strategy, but poorly timed sales risk giving away future growth at a discount. And KMD’s bosses reckon that selling off Oboz now isn’t the right play because it still has ‘potential’... so the battle between investors and KMD leadership continues.