Bosses at Kathmandu have today 'alerted' the market to the company's poor sales in the run up to Christmas.
Chief executive officer of the outdoor clothing and equipment retailer, Peter Halkett, said at the risk of potential overreaction, the company wanted to take a 'no surprises approach' by delivering news of poor sales.
For the 20 weeks up to December 18 same store sales have been less than last year, but the market has been stronger in New Zealand than in Australia.
Same store sales for the 15 weeks to November 13 rose 9.2 per cent, but in the 20 weeks to December 18 same store sales growth was just 2.8 per cent.
“Our trading performance throughout the Christmas period to date has been below expectations, which is a reflection of weaker consumer spending,” Halkett said.
Halkett said at least one UK store would close and the group, which is listed on both the New Zealand and Australian stock exchange, would be reviewing the situation week by week.
He also said they would look at the size of Kathmandu's IT department and head office and although the company had built up excess inventory, this was not a a significant problem.
The group anticipates the tough market will continue, but has high hopes of a 'lift' early next year due to the January sales.
Halkett said the group still plans to plough head with store expansion plans in 2012 as this would help drive growth.
For the 15 weeks to November 13 2011 sales had increased by 16 per cent on the previous corresponding period, but the trend was short lived.
Halkett refused to blame the weather for the downturn in sales and instead said that customers, although have increased the amount of items in their baskets when they do spend, are being much more cautious with their money. “Today isn't about a basket load of excuses, we are where we are.” Halkett said.
Halkett said online sales and new product lines are doing well.