The new boss of outdoor adventure wear retailer Kathmandu, Mark Todd, does not believe he will be throwing good money after bad by investing $NZ5 million ($4.56 million) into raising the brand's profile in Britain, despite the company's stores there never turning a profit and its losses actually widening in 2014.
Mr Todd, who will soon take over as chief executive following the recent resignation of long-serving boss Peter Halkett, said the extra resources devoted to brand marketing, advertising, its loyalty club and its online platform would eventually help drive sales across Europe in the next few years.
He said Kathmandu had never properly invested in the brand's profile in Britain. A recent focus on building its brand over there had paid dividends in the second half of fiscal 2014.
"We haven't yet attacked or built the brand awareness in the UK until the period we have just gone through and we had very strong same-store sales growth performance in the last six months," Mr Todd said.
"That gives us confidence to have a real effective campaign in the UK to build brand awareness to build our Summit Club [loyalty program] membership and grow same store sales."
Kathmandu on Tuesday posted a full-year profit of $NZ42.2 million for the year ending July 31, down 4.5 per cent, which was at the top of weakened guidance provided earlier in the year. Sales for the year rose $NZ8.9 million, or 2.3 per cent, to $NZ392.9 million.
Its Australian stores did the heavy lifting, with same-store sale growth up 6.9 per cent, while its New Zealand stores had a 0.1 per cent decline in same-store sales. Its British network of stores saw same-store sales rise 12.7 per cent.
However, investors are still wearing combined losses from its five British stores of $NZ2.9 million for 2014, up from a loss of $NZ2 million last year.
Although the British stores account for only 0.9 per cent of total group gross profit Mr Todd is determined to make the international arm a profit driver for Kathmandu.
"We have always held the UK as a beachhead to as a future growth opportunity."
He said after years of focusing on its flagship Australian and New Zealand stores it was time to switch attention to Britain and the rest of Europe.
"We have had other opportunities in the business that warranted more investment and attention in that time, particularly Australia, and as we continue to get close to the end of store rollouts in Australia it's then an appropriate time to turn our attention to growing the brand globally."
Kathmandu declared a final dividend of NZ9c per share, in line with last year, taking the full-year payout to NZ12c per share – also flat against the NZ12c paid out to shareholders in fiscal 2013.
