THE timing was impeccable for a woman with a reputation as a recluse who shuns the media. Kathmandu's founder, Jan Cameron, gave two interviews last week, just days after the trans-Tasman outdoor clothing chain she co-founded in 1987 revealed details of a $440 million float.
For the private equity owners of Kathmandu, which are now trying to float the company on the sharemarket, her words were a bombshell. Ms Cameron built the chain from a sleeping bag factory in Melbourne, with initial funds of $3000, into a multimillion-dollar venture that she sold for $280 million in 2006.
Now she has revealed she is well advanced in plans to set up an outdoor clothing business of 60 stores 30 in New Zealand and 30 in Australia to compete with Kathmandu next year. She said she was earmarking $27 million for the venture.
She was even dismissive of the Kathmandu model of regular 50 per cent off sales.
I imagine that if we are offering a similar product at competitive prices, at everyday low prices, around 50 to 60 per cent lower than Kathmandu, I imagine that might be quite attractive, she said. I really love the product and the industry and I see an opportunity with a different model."
She said it would be up to the consumer to decide if there was room for another chain.
Her plans were news to Kathmandu chief executive Peter Halkett, whose public relations people said he was in "back-to-back meetings" and on a roadshow around Australia and New Zealand before the November 11 initial public offering.
Mr Halkett has been telling institutional and retail investors about the rewards to be had from investing in the Kathmandu model, with its 85 stores on both sides of the Tasman and plans for a further 18 in New Zealand and 52 in Australia.
If all were to go to schedule, the sellers a consortium managed by Goldman Sachs JBWere and Quadrant Private Equity stand to make a profit of at least $165 million on what they paid Ms Cameron. Her bombshell has thrown a spanner in the works.
Mr Halkett had his mobile phone switched off yesterday but he told Fairfax Media at the weekend that Ms Cameron had signed a restraint of trade agreement with Kathmandu until May 2011. He said this prevented her from even mentioning plans if they involved starting a competing brand.
Ms Cameron was unperturbed. She said restraint of trade was a grey area of law that would be tested at some point. She did not believe it prevented her talking about her intentions.
KEY POINTS
Plans for $440m float.
IPO bombshell as founder announces plans for new chain.
Frequently Asked Questions about this Article…
What was the Kathmandu IPO announced in the article and why did it make headlines?
The article says Kathmandu unveiled plans for a $440 million float (initial public offering). It made headlines because founder Jan Cameron gave interviews announcing plans to launch a new competing outdoor chain just days after the IPO details were revealed, a move described as a surprise or 'bombshell' for the company and its sellers.
Who is Jan Cameron and what new retail plans did she announce that could affect Kathmandu investors?
Jan Cameron is Kathmandu’s co‑founder who sold the business in 2006. According to the article, she plans to set up a new outdoor clothing chain of about 60 stores (30 in New Zealand and 30 in Australia), is earmarking $27 million for the venture, and indicated she would pursue an everyday low‑price model potentially 50–60% below Kathmandu's prices.
How big is Kathmandu’s current store network and what expansion did the company propose ahead of the IPO?
The article states Kathmandu operates 85 stores across Australia and New Zealand and had plans outlined to open a further 18 stores in New Zealand and 52 in Australia as part of its growth story presented to investors ahead of the IPO.
Who are the sellers behind Kathmandu’s float and what financial outcome did the article attribute to them?
The sellers are described as a consortium managed by Goldman Sachs JBWere and Quadrant Private Equity. The article says if the IPO goes to schedule those sellers stand to make a profit of at least $165 million on what they paid for Kathmandu.
What did Kathmandu’s CEO Peter Halkett say about Jan Cameron’s ability to start a competing brand?
According to the article, Kathmandu CEO Peter Halkett said Jan Cameron had signed a restraint of trade agreement preventing her from starting a competing brand until May 2011. He also noted he was on a roadshow presenting the IPO to institutional and retail investors when the founder’s interviews emerged.
Did Jan Cameron accept the restraint of trade limits mentioned by Kathmandu management?
No. The article reports Jan Cameron called restraint of trade a 'grey area' of law and said she did not believe it prevented her from talking about her intentions. She indicated the issue would likely be tested at some point.
How might a founder launching a competing chain affect everyday investors considering Kathmandu shares?
Based on the article, a founder re‑entering the market with a 60‑store chain and a low‑price model could increase competition and potentially affect Kathmandu’s market share and margins. The announcement also created uncertainty around the IPO narrative sellers were promoting, which is a factor everyday investors may want to weigh when assessing risk before investing.
What timeline and investor communications were mentioned in the article for the Kathmandu IPO?
The article notes Kathmandu was conducting a roadshow around Australia and New Zealand to pitch the IPO to institutional and retail investors, and it referenced an initial public offering scheduled for November 11 (as stated in the article).
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