Surfers have a reputation for being chill and accepting.
That, however, may not entirely be true. KMD Brands, the parent of Rip Curl, has lost money for the year and has blamed some of its woes on blowback from its decision to use a transgender surfer in a digital promotion.
Rip Curl, much like what happened with Bud Light before it, probably did not think that using a transgender surfer in a social media post would rattle its customer base.
But it did, according to a report from TheIntertia.com.
The controversy started when Sasha Jane Lowerson, a transgender surfer, was featured in an Instagram post on the Rip Curl Women Instagram account as part of its Meet The Local Heroes of Western Australia campaign. Almost immediately, the post was flooded with negative comments and replies. Many fans and several activists even called for a Bud Light-esque boycott of the brand. Soon after, the post featuring Lowerson was quietly removed.
Rip Curl, as with Bud Light maker Anheuser-Busch, angered both its intended audience and right-wing activists by first making the post, then removing it and not standing by its transgender marketing partner.
“Our recent post has landed us in the divisive space around transgender participation in competitive sport,” a Rip Curl spokesperson shared with Surfer.com.
“We want to promote surfing for everyone in a respectful way, but recognize we upset a lot of people with our post and for that, we are sorry. To clarify, the surfer featured has not replaced anyone on the Rip Curl team and is not a sponsored athlete.”
KMD Group numbers dropped
KMD Brands has not publicly attributed its 2025 financial challenges directly to the transgender surfer controversy involving Rip Curl. In fact, new CEO Brent Scrimshaw has been very careful to not address it at all.
He has, however, been harsh in his assessment of the company.
“Since joining KMD Brands what I’ve seen is clear; the potential of our brands is far greater than what we are delivering today. We are investing in product innovation that continues to ground our brands in technical performance whilst delivering improved speed-to-market, design, and style,” Scrimshaw said in the fiscal 2025 earnings report.
KMD Group fiscal year 2025
- Group sales up 1.0% to $989 million
- Gross margin down 1.9% of sales to 56.5%
- Underlying operating expenses up 3.9% to $541.6 million
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Underlying EBITDA $17.7 million, down 64.7% YoY
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Statutory NPAT loss of $93.6 million; underlying NPAT loss of $28.3 million
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Net working capital $157.7 million, $40.6 million lower YoY
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Net debt $52.8 million, with significant funding headroom of approximately $235 million
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No final dividend declared as a result of FY25 operating performance
Source: KMD Brands
Image source: Pixabay
KMD Group is closing 35 stores
In the same report, KMD Group shared plans to close 14 more stores in addition to the 21 stores it had previously planned to close, including multiple locations in the United States.
The company is not only closing stores, but also has some openings planned.
“We have committed to opening six new stores (including three new Kathmandu flagship concept stores in the first half of FY26) and continue to pursue opportunities in line with our new integrated marketplace and store segmentation strategy,” the company added.
What is KMD Brands?
KMD Brands houses a number of names including Rip Curl. The company explained its operations on its website:
“KMD Brands is a family of outdoor brands dedicated to designing products for purpose, driven by innovation and committed to being the best for people and the planet. Our products are specifically crafted for the outdoors and rigorously tested by experts in real-world conditions.”
KMD Brands companies:
- Kathmandu: Founded in 1987 in New Zealand, Kathmandu specializes in quality clothing and equipment for travel and adventure. It became a certified B Corporation in 2019 and was recertified in 2023.
- Rip Curl: Established in 1969 in Bells Beach, Australia, Rip Curl is a leading global surf brand. It became a certified B Corporation in early 2023.
- Oboz: Acquired by KMD Brands in 2018, Oboz is a North American-based company that designs outdoor footwear with a focus on sustainability. It was certified as a B Corporation in 2023.
Source: kmdbrands.com
KMD plans a transformation
At the recent KMD Brands Investor Day, the Group detailed plans for the launch of a “global transformation strategy designed to unlock the full potential of its iconic brand portfolio and deliver sustainable, profitable growth.”
KMD Next Level key priorities include:
- Resetting for sustainable profitability by addressing operational leverage and unlocking new pathways for growth.
- Refocusing product innovation to continue to ground our brands in technical performance whilst investing in speed-to-market, design, and style.
- Reenergizing our store portfolio including new store segmentation to drive relevant consumer experiences and stronger brand expression for Kathmandu.
- Reimagining digital and data intelligence by adding new capabilities that enable the Group to accelerate its digital ambition.
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