Entrepreneur Jan Cameron has taken on Kathmandu, the company she founded, by investing in rival outdoor adventure wear company Macpac for an undisclosed sum.
The investment puts to rest speculation Cameron is set to offload her discount retail business, Retail Adventures, because the BRW Rich Lister plans to take advantage of her Retail Adventures supply chains and warehouses as part of the purchase.
It also makes good on earlier musings by Cameron that a rival chain could compete with Kathmandu, at lower prices.
According to the Australian Financial Review, Cameron will make an initial investment in Macpac of $20 million, and says Macpac will be looking to take on her former business Kathmandu, plus other outdoor goods companies Paddy Pallin and Mountain Designs.
National Retailers Association spokesperson Michael Lonie says it’s possible Cameron timed the purchase for the bottom of the market, with a float in mind.
“It’ll be interesting to see how it goes, because I would have thought they’d already reached their limit in terms of where they can operate in,” Lonie says.
Lonie says a key question is how Cameron will manage to expand Macpac’s business, seeing it operates in a niche market.
“If you follow the Kathmandu model, it’s not a shopping centre aspect,” he says.
Lonie says it’s possible Cameron has a float at the back of her mind, although finding cost-cuts could be challenging.
Having said that, the fact that Kathmandu can continue to offer 50% off sales suggests there is quite a good margin on outdoor activity products, Lonie says.
Cameron sold Kathmandu for about $330 million to private equity years ago. The business was listed on the sharemarket in late 2009; its shares are currently trading at the listing price of $1.70.
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