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Thread: Kathmandu IPO

  1. #1
    Guru Dr_Who's Avatar
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    Default Kathmandu IPO

    Anyone interested?

    The doc will not touch this one. Private equity sell down. Since JC sold out, the company have not done much, no inspiration. It has become just another clothing store. The fact that Goldman is selling down in this market is telling me maybe they want to get rid of this dog fast.

    There are plenty of cheap retail stocks out there. Kath will have to be priced extremely well (cheap) to have me even look at it.

    Maybe another lamb to the slaughter?
    Last edited by Dr_Who; 20-08-2009 at 09:59 AM.
    Having got ourselves into a debt-induced economic crisis, the only permanent way out is to reduce the debt either directly by abolishing large slabs of it, or indirectly by inflating it away.

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    Lack of initiative and growth will cause me to steer clear.. I think this company peaked in the JC days.

    Don't like their "premium pricing" with continuous discounting model. You would have to be a sucker to pay anywhere near their retail prices, even at 50% off their products are well overpriced.
    Last edited by Peitro; 20-08-2009 at 10:00 AM.

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    They will trade off the `Kiwi icon' sentiment. Similar to Pumpkin Patch. Agree with the doc, plenty of other retail stocks out there, we are in a recession, and the Feltex experience makes the market wary of private equity sales.

    One to watch - but not interested in the IPO.
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    Will be interesting to read the promotors spin on this one.

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    Prob put of a value of $400 mill on it

    Big price for a brand name .... and probably lumbered with heaps of debt

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    Yeh including $399 mill for good will!!!

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    Senior Member kizame's Avatar
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    I thought private equity partners were actually supposed to improve the overall business,either because they thought the business was not being managed to it's optimum,or because it was an absolute steal being either debt free or just plain undervalued.
    Or have I got that wrong?

    If they want to list this,they must make a profit presumably,so I guess you would have to wonder what is going to be left on the table for Ma n Pa.

    Would have to be good value, low PE and
    major expansion plans,with real good management,otherwise why the hell would you want to go there. PPL is a better bet.

  8. #8
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    Default Would need to see the numbers

    Yes the vendors would have to be realistic with pricing to get an IPO away in this market.

    However I think they've been encouraged by good performance cf. other retailers. GSJBWere released a communication last month on 14 July from which I quote;

    "The board of Kathmandu has forecast a significant 20% increase in operating performance during FY09(July), to $42m EBITDA. Given the strength of the recent trading and the impact of a range of cost and pricing initiatives it is likely that Kathmandu's final result will be ahead of this budget, which will be an excellent result given the highly volatile and difficult retail environment.
    Last edited by glennj; 20-08-2009 at 10:59 AM. Reason: typo

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    Will have to wait and see what they come up with of course but I reckon previous posters have summed it up pretty well. Retailing has moved along since Kathmandu's glory days and it's now got a lot more competition in its space.

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    Private Equity bailing. The numbers will look good for the float and a year out then profit will mysteriously evaporate and share holders will be left holding a heavily indebted, average performer. Did I hear someone mention Feltex?
    Last edited by zac; 20-08-2009 at 02:20 PM. Reason: typo

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    I am not sure what existing listed retailer I would compare them to. They are quite different to Pumpkin Patch/Hallensteins which are fashion season driven. Kathmandu has seasonal stock but they also carry a large range of high-end items like $500 raincoats, tents and sleeping bags etc. You don't buy one of those every year (well, I don't )

    A lot of these retailers depend on new store openings to drive sales growth. Kathmandu is relatively mature in NZ and also has a sizeable presence in Australia. So will there be growth in store numbers?

    You really have to see the figures on same store sales to make a judgement. Will be an interesting prospectus...

    If I was in the market for a retail stock it would be PPL or MHL. Just not now
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    Wink

    Yeh as long as they price the float on a P E of 5-6 for 2010/11 it should be a success and not 14 + that they think they deserve

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    Senior Member warthog's Avatar
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    Maybe they should offer membership of the exclusive Burger Fuel VIP club as an incentive?
    warthog ... muddy and smelly

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    .....in my mind this is embarrasing and only further cements the view held by many that the sharemarket is a driven by a naked unadulterated lust to make a quick buck....a merchant bank initiating a public listing !!!!!!!!!!!! give me a break......

  15. #15
    Guru Dr_Who's Avatar
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    It seems to me like no one on this forum is applying for any shares in the IPO, so begs the question, who will they pitch this to? Are the mums and dads who lost out in Blue Chip, Bridgecorp etc spend their last dime on the Kathmandu IPO?
    Having got ourselves into a debt-induced economic crisis, the only permanent way out is to reduce the debt either directly by abolishing large slabs of it, or indirectly by inflating it away.

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