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Thread: Kathmandu IPO

  1. #1171
    percy
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    Quote Originally Posted by winner69 View Post
    Very ethical company so maybe not the case

    They plant one tree for every pair of shoes sold ...cool
    Most probably Oboz would be a better fit with Hiut Jeans,?

  2. #1172
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    Quote Originally Posted by percy View Post
    Most probably Oboz would be a better fit with Hiut Jeans,?
    I’ll tell Xavier about Hiut ....next takeover target for him eh
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  3. #1173
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    We critiqued this takeover well percy haven't we

    Surprised the many Kathmandu shareholders on this site haven't come out and told us how good it is
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  4. #1174
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    Quote Originally Posted by percy View Post
    The excitement builds.?

    Wonder what Rod Duke makes of it.?
    Doubt Rod that impressed ...he likes selling things and not making things

    Doubt he'll be rushing out to stock oboz in Rebel
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  5. #1175
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    percy ....these boots your scene?
    Attached Images Attached Images
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  6. #1176
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    Quote Originally Posted by winner69 View Post
    We critiqued this takeover well percy haven't we

    Surprised the many Kathmandu shareholders on this site haven't come out and told us how good it is
    Only a Kat shareholder via my interest in Briscoes but, like percy and others I'm not excited about the prospect. Sounds like moving away from the knitting for the sake of size and "international expansion"?

  7. #1177
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    Oboz get 4+ stars for customer satisfaction on Amazon (US$173 for the pair above)

  8. #1178
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    Quote Originally Posted by winner69 View Post
    percy ....these boots your scene?
    No me,but they look as though they would do the business.

  9. #1179
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    interesting to see the concerns over the OBOZ acquisition, with not a lot of positive enthusiasm for it. I'll rise to the bait and outline a more bullish case ...

    first, good result from KMD core business. the improvement in inventory, margins, and the recent sales growth since the period-end all very impressive (big sales periods yet to come of course). so well done KMD.

    re: OBOZ. Yes, I agree, it's a stretch and outside their core competency as a NZ/Aust centric, apparel active-wear retailer. So a few red flags. BUT there is a bullish scenario. First, they know OBOZ well. They've been retailing their stuff for 10 yrs and were OBOZ's second customer, IIUC. They're not looking to integrate OBOZ and the head of OBOZ stays on to run OBOZ (query for how long of course). Second, there seems good alignment in terms of corporate and brand values & positioning. OBOZ seems established with well-regarded products. Third, shoes aren't necessarily a horror business. Yes, I recall MHJ shoes; but Berkshire Hathaway owns a couple of footwear businesses and they're well performed. Ie, H Brown & Brooks. Some of the Australian apparel/footwear chains have performed eg I had a terrific run with Colorado some years back. Fourth, valuation seems ok. 10x EBITDA for a business that is capital light, with a track record of good growth - from the limited financial details I've seen, it's not obviously an overpay (yes, some risks from the lack of contracts, but I guess if they have well-established relationships, that's valuable too. Plus, how long would the manufacturing/distribution contracts be for anyway. One -two seasons?) Fifth, KMD might be able to leverage the OBOZ relationships to sell more of its other product into the US market. Some potentially large revenue synergies there (albeit that may not ever eventuate).

    I agree this changes the risk profile of KMD and stretches mgmt further. They are also paying more for OBOZ in terms of valuation multiples than the multiple which KMD trades on - so a risk the market won't pay up for the acquisition. On the other hand it does offer some growth options.

    The big question: would I have done it if I run KMD? The acquisition is not compelling enough in my view, so probably not. But I'm a risk-averse type of investor ...

    PS. I'm also a BGP shareholder (much larger stake) ... with hindsight perhaps Rod should have paid up when BGP had the chance. I can't believe he would support the OBOZ acquisition, but at 20% ownership he doesn't get much more say in matters than you or I do.

    Ultimately, the question is: how much confidence do we have in KMD board and mgmt to manage this well and deliver on the bullish scenario? hhhmm. Simonet has done well, IMHO, but the chair I worry about it. Esp. the lack of retail and international experience, his track record doesn't convince me. OK, ok, I tried to be bullish ...

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    You make a good case for the defence, jg, and the bullish scenario may well play out to be correct. A positive is that BGP supports the capital raising so I guess that means that Rod D is on side!

  11. #1181
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    New Zealand companies have an absolutely outstanding record of buying overseas investments for too much and at the wrong time. Don't worry, Xavier's gonna show them how its done.

  12. #1182
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    as at 14:27:21, Wednesday 21 March, 2018 (NZDT)
    Briscoe Group supports Kathmandu capital raising

    BGP
    21/03/2018 14:27
    GENERAL
    NOT PRICE SENSITIVE
    REL: 1427 HRS Briscoe Group Limited

    GENERAL: BGP: Briscoe Group supports Kathmandu capital raising

    Briscoe Group Limited (NZX /ASX code: BGP) today confirms it has participated
    in the capital raising announced by Kathmandu Holdings Limited (KMD)
    receiving confirmation of an allocation of 2,570,925 KMD shares from the
    institutional placement for a cost of $5,553,198. It also intends to
    participate in the Share Purchase Plan.

    Rod Duke, Group Managing Director said, "We are very supportive of
    Kathmandu's initiative to diversify the business and position it for greater
    international growth."

    For and on behalf of the Board of Directors

    21 March 2018
    Rod Duke
    Group Managing Director

    Briscoe Group Limited is a company incorporated in New Zealand and registered
    in Australia as a foreign company under the name Briscoe Group Australasia
    Limited (ARBN 619 060 552). It is listed on the NZX Main Board and also the
    Australian Securities Exchange as a foreign exempt entity. (NZX/ASX code:
    BGP).
    End CA:00315840 For:BGP Type:GENERAL Time:2018-03-21 14:27:21

  13. #1183
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    really intrigued that BGP, and Rod D personally, supports the OBOZ acquisition. He floated BGP and raised a lot of cash many years ago. At the time they talked of potential acquisitions. but BGP/Duke have never completed any acquisitions - except perhaps Living & Giving which was small, and the 20% stake in KMD. This was despite getting close on a few, I recall Baby Factory for example, and the ASX compliance listing for BGP (which always looked like an enabler for an acquisition. I thought ADH).

    Why then does he support the OBOZ acquisition. Duke's stated rationale for why it makes sense could equally apply to BGP. Ie, BGP could also "diversify and position for international growth" through an offshore acquisition, but they've never done it. And apparently, don't want to (for reasons we all could understand). Yet he supports the KMD initiative. I don't understand the logic. Is it being consistently applied?

  14. #1184
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    Perhaps it's a way to get growth and (overseas) diversification without risking the main asset - BGP - too much?

  15. #1185
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    Quote Originally Posted by macduffy View Post
    Perhaps it's a way to get growth and (overseas) diversification without risking the main asset - BGP - too much?
    It will be fantastic for 2 to 4 years.Can't open enough stores in USA to keep up with demand.Canada next,then Brazil.
    Then Xavier will resign for family reasons,just before it turns to custard.
    Shoes sold off at a great loss.Capital raise to pay off bank debt.
    Shareholders are saved as Rod makes a very reasonable takeover offer.[Reasonable for Rod}.

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