New Zealand company Kathmandu yesterday entered into a binding agreement to acquire 100 percent of the Rip Curl Group Pty Limited for NZ$368 million. The deal is expected to be completed by the end of 2019.
The sale should come as no surprise, Rip Curl’s founders, Brian Singer and Douglas Warbrick, who owned 90 percent of the company, had been trying to find a buyer for their iconic brand for many years.
The sale was announced to the New Zealand stock exchange on Tuesday morning and essentially adds to the outdoor clothing and camping gear retailer with an action sports arm that also addresses seasonality issues.
“The acquisition of Rip Curl creates a NZ$1.0 billion global outdoor and action sports company anchored by two iconic Australasian brands and provides the opportunity for Kathmandu to considerably diversify its geographic footprint, channels to market and seasonality profile,” the media release explains.
Rip Curl was born at Bells Beach, Australia in 1969 and today enjoys a global presence across Australia, New Zealand, North America, Europe, South East Asia and Brazil. Rip Curl’s vision is to be regarded as “the ultimate surfing company” in all that it does.
The company always had a rich culture and, quite famously, at least in the trenches of their Torquay marketing and design base, no one ever got fired for surfing.
Rip Curl is a proud innovator and, in wetsuit and watch technology, sits at the forefront when it comes to enhancing a surfer’s experience. You can read our review of their latest wetsuit innovation, the Heat Seeker right here.
Kathmandu, on the other hand, is a very successful company that has mastered the art of squeezing production costs to the bare minimum to create vast lines of inexpensive outdoor clothing and camping products. They were one of the first to disrupt the outdoor clothing sector with their supermarket-style approach to clothing and camping equipment.
The group now has a combined footprint of 341 owned retail stores, 254 licensed stores and over 7300 wholesale doorways globally. Alongside the benefits of sheer scale, the acquisition will significantly diversify Kathmandu’s geographic revenue profile and provide access into new markets. Rip Curl’s presence in North America and Europe, which are both strategic priorities for Kathmandu, will provide capability and relationships for Kathmandu to accelerate its international expansion.
Additionally, Rip Curl will be able to leverage Kathmandu’s online capabilities to accelerate growth in its under-penetrated online channel.
There are currently just five Rip Curl stores in New Zealand. According to reports we won’t see more added and we’re unlikely to see Rip Curl products appearing inside Kathmandu stores.
“We are excited about the opportunity to partner with another iconic Australasian brand that shares our vision of creating high-quality functional products for outdoor and action enthusiasts,” offered Rip Curl CEO, Michael Daly. “We look forward to continuing to grow the Rip Curl brand as part of the Kathmandu Group.”
“We are excited about the opportunity to partner with another iconic Australasian brand that shares our vision of creating high-quality functional products for outdoor and action enthusiasts.”
Daly will continue to lead Rip Curl from its headquarters in Torquay and will report to Kathmandu CEO, Xavier Simonet. Along with Rip Curl’s founder shareholders, Daly has also elected to receive some of the consideration for the acquisition in Kathmandu shares.
“This is a fantastic opportunity for Kathmandu to grow and diversify,” Simonet shared. “The acquisition of Rip Curl transforms Kathmandu into a NZ$1.0 billion outdoor and action sports company, anchored by two iconic global Australasian brands. The combination of Kathmandu, Oboz and Rip Curl achieves diversification in product, channel, geography and seasonality, and creates a platform for the acceleration of our brands’ global expansion into new channels and markets. Importantly, there is also strong cultural alignment between our brands, underpinned by a shared focus on quality, innovation and sustainability.”
“There is also strong cultural alignment between our brands, underpinned by a shared focus on quality, innovation and sustainability.”
“We wish to acknowledge the role that Rip Curl’s founders have played in building the iconic status of the Rip Curl brand internationally as well as its unique cultural identity, and are pleased that the founders and CEO wish to remain invested in the ongoing success of Rip Curl under Kathmandu ownership”, Simonet added.
Under the new Kathmandu Group, each brand will retain operational ownership of their respective businesses, however shared support functions will be considered where operational value can be derived. This will allow the group to protect and preserve the strong brand identities and cultural values associated with each of the Kathmandu, Oboz and Rip Curl brands.
Rip Curl’s New Zealand manager, Leon Parkin, is based out of an office in Takapuna and manages sales and local marketing for local retailers and the five stores. He was unable to be reached for comment today.