KMD Brands has fueled a DTC push for its footwear subsidiary Oboz by opening shop-in-shop concepts across six Kathmandu stores in both Australia and New Zealand.
The news comes from KMD’s preliminary FY24 annual report, which confirmed the move was done to reduce reliance on Oboz’s US wholesale customers following a 20 per cent fall in total revenue for the brand.
For the last financial year, Oboz’ wholesale sales made up 91 per cent of its total revenue, with just nine per cent leftover for online sales. Wholesale sales drove the overall decline, down 23.1 per cent.
Some of the key Kathmandu stores sporting Oboz displays include Tower Junction in Christchurch and Frankston in Victoria.
“The strategic placement of the brand within the vast Kathmandu ANZ store network boosted sell-through and illustrates the power of group integration through simple and streamlined execution,” the report read.
“The North American team also activated 15 shop-in-shops across US retailers, elevating the brand’s visual experience for customers in its most important market.”
According to KMD’s report, the wholesale channel across the business has remained challenging throughout FY24 as accounts reduced their own inventory holdings due to market pressures.
Alongside the 23.1 per cent in Oboz’s wholesale revenue, Rip Curl also reported a plunge in the category by 13 per cent, adding to an overall revenue decline for the surfing brand of 7.3 per cent. DTC sales for Rip Curl for FY24 were only down 2.8 per cent.
Rip Curl’s wholesale channel makes up 39 per cent of total revenue.
“Oboz experienced a greater impact due to its higher reliance on wholesale sales, while Rip Curl was protected by its stronger direct-to-consumer business,” KMD’s report read.
The shift towards DTC for Oboz added to an overall omnichannel push, as KMD vowed to boost online sales.
Kathmandu’s onli8ne sales were down year-on-year by 18.9 per cent, although positive signs of recovery emerged in the last quarter of the year according to the group.
“A strategic realignment of priorities led by the brand’s new general manager of digital saw several improvements to the site’s user experience (UX) and user interface (UI),” KMD reported. “Online sales made up 13.3 per cent of direct-to-consumer sales in FY24.”
Meanwhile, Rip Curl’s online sales grew by 8.6 per cent in the last financial year, reaching 11.9 per cent of DTC sales. The brand made user and customer experience improvements to its trading sites throughout the year, including a UX and UI overhaul to improve conversion.
Rip Curl also introduced end of season discounting online in FY24, according to KMD, which drove volume.
“In only its third full year of direct-to-consumer online trading, Oboz again demonstrated that reaching customers through the brand's own website can unlock growth,” KMD reported. “[Online] sales were up 31.7 per cent, year-on-year, benefiting from a commitment to diversified sales channels.”