Kathmandu: Peak Performance Parkas or Puffer Jackets for Posers?

This month, you’re CEO of Kathmandu, an outdoor gear brand born in New Zealand and famed for kitting out climbers and hikers.

You built your brand with outdoor credibility by combining your Himalayan name with NZ practicality and a high-end product.

But one chilly Melbourne morning, you notice something odd: half the people on Collins Street are wearing your jackets… and most of them haven’t set foot on a mountain trail - ever.

Is now the time to get into high street fashion and position your puffers, vests and fleeces for everyday wear? Or do you keep aiming for the summit with your high-end technical gear?

Which way would you go?

The Strategy Standoff

Strategy A: Persist with Peak Performance Positioning

You stick to hard-core outdoor gear and target active outdoor recreation enthusiasts.

That would protect your brand credibility and you'd make higher margins.

However, you'd be chasing a small market, and sales volume would keep swinging with weather and seasons.

Strategy B: Puffers for the People

You take the business hard into lifestyle and casual wear for the mainstream market.

You focus your range on puffers, fleeces, and trendy clothing and address a much bigger market.

However, fashion trends can be fickle; your competitors would now be giants, and your brand might lose cachet with outdoor types, your loyal customers.

answer

So, Which Did They Choose?

Cast your vote to find out!

Better luck next time, Strategy B was chosen!

Good Job, Strategy B was chosen!

But what did this mean for Kathmandu...

Outcome: Facilitator Commentary

Matt Braithwaite-Young

Managing Partner

t +61 2 9002 3100

Contact Matt

From Base Camp to Runway Chic

Leaning on their outdoors credentials Kathmandu went for the mass market with its puffer jackets and extended street fashion range.

When the bankers uniform became a puffer vest worn over a business shirt, Kathmandu spotted their opportunity to get into urban fashion.

Expanding the Lifestyle Tent

Kathmandu doubled down with the acquisition of Rip Curl, a surfing apparel brand, and Oboz, a footwear brand. These days most of their revenue now comes from everyday clothing and accessories, not hard-core adventure gear.

And the Kathmandu brand and product range is presented as a fashion brand with technical appeal.

This is a good example of a brand starting with a niche and then broadening its range to capture a wider market.

A Trail Not Taken

Had Kathmandu doubled down on technical credibility, it might have become the Patagonia of the Southern Hemisphere. Instead, they chose the mass market and doubled down on fashion statements.

Kathmandu may have underestimated the work it takes to keep up a fashion brand. After all, when everyone in the CBD wears a Kathmandu puffer jacket, the brand may start to feel less “summit tested” and more "Dad-tested".

And if the weather is warm (which it has been), they don’t yet have the style portfolio to make up for the seasonal sales impact.

Descending Sales Seek the Next Level

Although Kathmandu group diversified with the new brands outside their core, sales have been disappointing, and profits are in the hole.

Kathmandu brand sales were down 6.4% in the most recent period, and profit was down 75%.

CEO Brent Scrimshaw blamed the weather: “The volatility of Kathmandu’s sales performance is frustrating… warm weather in Australia has …impacted sales”

But Kathmandu hopes investors will be cheered up with their recent announcement of the project Next Level, which is designed to reverse the brand’s declining performance.

The plan is to “continue to ground our brands in technical performance” while “investing in speed-to-market, design and style.” Improve technical appeal and regain brand credibility.

They also announced three new Kathmandu concept stores in Australia and NZ to try to recapture the adventure magic and regain technical credentials.

Lessons for Leaders

Kathmandu’s dilemma is one many leadership teams face: authenticity vs mass appeal.

Do you protect the purity of your brand and risk staying niche, or broaden your base and risk diluting what made you special?

Both paths can be right, but only one might fit your organisation’s culture, market timing, and your shareholders' appetite for risk.

At Turning Leaf, we help leadership teams surface these trade-offs clearly, align on the best path, and commit to actually doing it.

Want help running your own live strategy standoff?

Contact Turning Leaf today at www.turning-leaf.com.au

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