KMD Brands Limited (KMD) Earnings Call Transcript & Summary

Good morning, everybody. Good morning, everybody, and welcome to Kathmandu's 2021 Investor Day. Just a bit of housekeeping before we start as there's a few more people joining us. We will have a Q&A session at the end after the series of presentations today. As we're going through, if you want to have any specific questions asked, please type them in the Q&A box. I will be moderating and combining questions where possible to ensure we cover as much ground as we can during the time allotted for the Q&A. Also, just as a reminder, today is not a financial results presentation. It is an opportunity to hear about the strategy of the business, the growth opportunities and hear from management. So if you can keep your Q&A to questions on those topics, that would be appreciated. As I said, it's not a financial results presentation. So thank you again for joining us. And on that note, I'll hand across to Kathmandu Holdings' Chairman, David Kirk, to start the Investor Day. Thanks, David.

Thanks, [ Ryan ] and good morning, everyone. It's great to have you. Thanks very much for joining for our Investor Day. We'll just go on the first slide, which I think sets out the agenda. Agenda is straightforward. You'll be hearing from the most senior executives of the company, led, of course, by Group CEO, Michael Daly. In addition to the CEOs of the 3 brands, you'll also hear from Eva Barrett and Robert Fry, who are respectively the Chief Customer Officer and Chief Product Officer at Kathmandu, as we're doing a deeper dive into Kathmandu on this call. Moving on to the team. I won't go through each of the team members. But as I say, you're hearing from the most senior executives in the organization and the Head of Customer and Product for Kathmandu. Finally then for me in a brief introduction, I just stepped back from the sort of formal process of introducing us and if I was in your shoes, if I was coming on this call and giving 2 hours of my time, what would I want to walk away at the end of it having learned? And what I thought was -- what was clear to me was I would like to know what's the competitive advantage of this group, what's the plan to take advantage of that competitive advantage to see that manifest in growth and profitability. And finally, thirdly, what's the investment case. So I'll quickly summarize what we believe those things are, and you can explore those further with the team as we go through the 2 hours. Firstly, what's the competitive advantage? Iconic technical brands, products that deliver on the brand promise, genuine and growing ESG credentials. We held ourselves up against pretty much any group of brands in the world. Diversification, multichannel capability and growing multichannel capability. And for me, most importantly of all, a team of executives that lives and breathes their brands and knows how to execute. That's -- collectively, that adds up to significant competitive advantage for this group. I'm not going to say anything about the plans because that's what you're going to hear about from management today, how we intend to utilize our competitive advantage in our execution. But thirdly, what's the investment case? Well, I break this into 3 things. Firstly, there's the reopening, and we know that both Kathmandu and Rip Curl have been significantly disadvantaged by the lockdowns in Australia and New Zealand, and that's now unwinding. But we also know that Oboz and Rip Curl, in different ways, have suffered, to a lesser extent, but still significant, suffered from supply chain issues, and those are also unwinding. And you can certainly address it a bit more today if that's of interest to you. Second part of the investment case, of course, is what every company has to do and has to execute. So it's growth in revenue and growth in profitability. And just to summarize quickly for the 3 different brands. For Rip Curl, it's about -- Rip Curl is in a good place. Rip Curl's executing well and growing strongly. It's about relentless focus on being the best, the iconic surf brand in the world and executing globally, catching up a bit on some of the digital opportunities that are out there, catching up on loyalty program [indiscernible] club, Rip Curl, all to continue what is a very strong role that, that business is on. But Kathmandu, which has been the business that's been most flattened by COVID because of its inability to -- people's inability to travel to a large extent, the team has used that time extremely well. And if I was to summarize the growth and profitability focus of Kathmandu, it begins with the reimagining of the brand for a latent customer segment. And that's a younger customer segment and Reuben and Amy and Robert will all talk about that without giving -- setting back from our core customer segment, which is the 40 pluses. And increasingly, that execution, which will obviously roll out first in Australasia, that execution will be taken globally and larger market, larger opportunity for Katmandu as they do that. With Oboz, I would say, again, a business that's performing extremely well, challenged a bit by some supply chain issues but extremely -- performing extremely well in its core business. It's about repositioning the business for a small business. It was a, kind of -- wont say captive and -- but very reliant on REI in the U.S. to a much broader business with broader channel exposure, a whole wave of new product development coming through and a building digital presence and a broadened wholesale position. So really strong, really clear growth and profitability claims for each of those business to deliver on an investment case view. And thirdly and finally, and this will take time, we all know that these things sort of -- we always say they take time and then suddenly, boom, they change. At some stage, it's going to be a re-rating of Kathmandu Group, re-rating of valuation multiples because [ increasingly ] people will understand that this group, with its iconic brands and its diversification and its multichannel capability, is a genuine global house of brands. And needs to be thought of as such and to be valued as such as opposed to a retail-heavy, Australasian-heavy surf-wear and outdoor-wear company. We firmly believe that transition is going to happen. And as you know, from your own experience, when those transitions happen, they happen quickly. Thank you. I hope that's a useful start, usual introduction for you. The Board is highly motivated and focused and works very well with the management team. It's a really good relationship. And we're looking forward to taking the business forward into this new era as they open up. So thank you

Great. Thank you, David. Well, welcome, everyone. Pity we couldn't do this in person, but this is the day and age that we live in. I want to start with our journey, our journey as a company and where we're headed and who we are, really picking up from some of the points that David made. Kathmandu really started life as an Australian and New Zealand retailer with stores and of course, more recently, a strong online presence. With the acquisition of Oboz and then Rip Curl over the last couple of years, what we've seen is the transition in the company, a real change from being an Australian-New Zealand retailer to a leading owner of global brands, a house of brands, if you like. And importantly, with that is the diversification, which I really think is the important message, diversified in terms of brands, diversified in terms of the products that we offer, the seasons that we really focus on, and diversified in not only geographies but also channels, which are much bigger wholesale business now. And we really think that's important for everyone to acknowledge and certainly a key strength of ours as we move forward. In terms of the brands that we operate and own, there's some key attributes that we really think are critically important and not only important but points of difference. We want to inspire people to live an active outdoor life. So having brands that portray that message, live that life are really important to us. We're also really interested in brands with global appeal. Brands that can really appeal to all continents of the world is really important to us. And we've got brands at various stages of life in their respect, and the brand CEOs will talk about that in due course this morning. Products of a technical nature are also really important to us. We want brands that are designed for a purpose, designed for the outdoors to be used in the outdoors, to stand up to the rigors of the outdoors, and that's essential to who we are and what we're about. And finally, brands that really fit in with our ESG aspirations and our leadership credentials and our overall principles in that space. So they're some of the key attributes and points of difference, we think, are really important. Now with that change in -- from an Australia New Zealand retailer to a leading owner of global brand, we certainly are well advanced in looking at a rename of the company to, I guess, mark that transition. We're well advanced on those plans, and we'll be looking to make an announcement that in due course in the coming months. Moving on to the next slide there. In terms of the group strategy, nothing new on this page that wasn't already covered in terms of the full year results presentation. In terms of our strategy, we've got 4 key components of our strategy. They are building global brands, elevating our digital experience and capabilities, leading in ESG and really driving and leveraging operational excellence across all of the brands that we own and operate. Just a quick comment with respect to our balance sheet and where we're at. As you all know, we finished the year with a net cash position with ongoing strong trade. We expect that to continue, of course. That does give us the flexibility of M&A and/or capital management. We think that with our existing brands, we've got quite a lot of runway and growth potential. So certainly, M&A is not necessarily an immediate priority. That said, if the right opportunity come along at the right price, we would certainly take a look at it. And with that, there may be the opportunity for some capital management once we get the certainty of ownership across all operations, certainly of opening, I should say, across all of our operations around the world, which is certainly becoming clearer by the day with the opening of Auckland in the coming days. Next slide, please. The first part of the strategy. In terms of building global brands, we've mentioned that a couple of times already. Each of the brand CEOs are going to talk in turn about the detailed plans within the brands to really drive that global expansion. So I'll let them talk in each of the brands in turn. One I want to talk about specifically is just a summary of what those opportunities are, which leads into the next slide. And really, with what you see there is just an overlay of, well, where we see the key geographical expansion opportunities. And if I just quickly look to summarize them. In terms of North America, one of the biggest markets in the world, both Rip Curl and Oboz have really strong momentum in that market across wholesale and online, and certainly also, Rip Curl in terms of its own stores. We see no reason why we can't continue that momentum in that market for those brands and certainly targeting to be top brands in their respective [ turf ] and outdoor footwear categories in the coming years. We're really excited by the launch of Kathmandu into the North American market. We're launching initially into Canada with a wholesale and online presence, and Reuben will talk about that shortly. In terms of Europe, Rip Curl, again, has strong momentum in that market across all of its channel it operates, wholesale, in store and online. Again, no reason why that can't continue to evolve. Equally, Kathmandu, similar to Canada, will launch into Mainland Europe with wholesale and online in 2022, and Reuben will talk about that. And an ongoing potential for Oboz distribution in Europe is also a good opportunity. Closer to home, as David mentioned, there's a fantastic opportunity for Kathmandu as things reopen, both in terms of stores, border, interstate borders and, most importantly, international borders gives a great opportunity for Kathmandu to recover some lost ground that was lost through COVID. And certainly, it's a great opportunity there for the Kathmandu business to bounce back and bounce back really strongly. Particularly with all of the work that Robert and Eva are doing in product and brand, and I'll talk about that in due course, I think there's great strong online potential for all of our brands in the ANZ market. Rip Curl, continuing its momentum in terms of its own stores also and as well as wholesale, and Oboz, potential to launch wholesale for Oboz in the Australia and New Zealand market in short term. Just [ quickly ] in terms of emerging markets, we're finding a lot of those markets recovering more slowly from COVID. So we'll be -- we'll still continue to operate in those markets, but we'll be probably not as major focused on those markets as the 3 key markets, but we'll continue to look at opportunities. And finally, with respect to our retail portfolio, which is a question we get quite a lot, we think that our overall store number count over the next couple of years will continue to expand and grow. Not necessarily aggressively, but we think there's some logical store optimization opportunities, some closures more likely locally, and that being offset or more than offset by some well-timed and placed openings for not only Rip Curl, but also Kathmandu with time in offshore markets, particularly the U.S.A. and Europe. Moving on to the next area of focus. Elevating digital, what we do know is that the consumers' spending habits and the way they interact with brands continues to change. All brands are needing to evolve and change and invest in this space. And certainly, our brands are no different. We have a short- to medium-term goal of achieving 25% of our direct-to-consumer sales being online. I think that's a very achievable goal. And indeed, many companies have already achieved this. We're working hard towards that goal. And we're really confident that with the initiatives that we're pursuing, that those goals will be achieved. In terms of where we're focusing our energies, and I should say a lot of work has already happened in this space, and we're getting some really good momentum, and certainly, there's good runway for future growth in this space. So we're enhancing our platforms, so bringing best-in-class technical platforms in place to all of our brands across all of our markets. That's enabling us to deliver that minimum or the minimum expectations, at least, if not more than an expectation that our consumers want with respect to brands, whether it be click and collect, buy in-store, deliver home, buy online, [ talk to someone ] in store and so forth. As David mentioned, loyalty, we think, is an important payment of what brands do in today's market. Rip Curl will be launching its first loyalty program in 2022, and Kathmandu already has a fairly advanced loyalty program that we'll be looking to relaunch in 2022 as well using some new technical platforms. Finally, with respect to data insights and analysis, it's a key area of focus for us, a key area of making sure that we understand our consumer better and really through that understanding, by analyzing the data, really targeting some more personalization at our consumer to ensure we can really leverage our relationship with our consumer as much as possible. So a lot of time, investment and money. There are a lot of upside in this space for all of our brands as we move forward. Next slide. With respect to ESG, it's been mentioned a couple of times, Kathmandu has been really an early mover in this space as one of the first among the largest B Corp accredited companies particularly in the Australian and New Zealand market. We think that's a really important initiative, and it's one that we're very well advanced in extending that accreditation across all of our brands. And we'll be looking to confirm that hopefully in the next 12 to 15 months across both the Rip Curl and the big Oboz brands. Going further than that, we want to go further than just be core competitive. We've actually done a lot of work in the recent months and doing a group materiality assessment, talking to all of our stakeholders as to how they think we can be better and where our areas of focus should be. The 3 areas that come out of that were our people and our communities, which is about providing that safe and strong environment, not only for our own staff, but also for our staff and our suppliers and right through to all of the communities that we operate within. Science-based climate action, so setting some very clear targets that are science-based around climate action and holding ourselves accountable to that. And finally, circular business model. So really embracing the principles of circularity in everything that we do from the start, where we design products right through the development, the sourcing, our supply -- our broader supply chain and getting those products to consumers and, of course, returns. So that will be the key areas of focus. Underpinning all of that is transparency. We think it's an important principle to apply transparency, being clear and open about where we're headed and how we're performing. And that's something where we look to really ramp up in the new year in 2022 as we announce some of our clearer targets and really start to hold ourselves accountable toward achieving those targets. Next slide. And this slide gives a bit of an outline of some of the commitments we've made there as far as where we're headed in terms of announcing some of our targets, submitting those science-based targets, the B Corp accreditation and moving to an integrated annual report for the FY '22 financial year. And finally, for me, in terms of leveraging operational excellence, a lot of work has been done in this space in terms of bringing these brands together. In reality, we probably were distracted quite a bit by COVID. So there's still a lot of work to be done. And that's really exciting for me because what that delivers is some really good revenue opportunities, but not only revenue opportunities, but also margin and cost opportunities. And that will be something that we'll be looking to aggressively pursue, particularly over the next 12 to 24 months. A lot of work has already been done in advancing that system, and that work is underway and continuing and also in aligning our structures, our operating structures, but we still have a lot of work to do in supply chain and property, in particular. And we think that those initiatives will be important in driving ourselves to achieving that 15% minimum EBITDA margin as well as, of course, fueling good sales growth as we pursue those opportunities. And we'll be looking to be more transparent with some of those initiatives in the new year and [ really ] identify where we're headed in that space and where we can deliver those revenue margins and cost opportunities. Next slide, please. So with that, I'm going to now pass you on to Chris Kinraid, our CFO, who's going to give us a bit of a trading update and outlook, and then we'll pass back to [indiscernible].

Thank you, Michael. Cheers for that. Moving to the trading update. Q1 was a quarter heavily impacted by COVID closures, which were longer and deeper than the same period last year. Same-store sales for Rip Curl were minus 9.4% overall and Kathmandu minus 17.6%. However, where stores have remained open, we're seeing positive growth. For Kathmandu, a positive 16.3%, and for Rip Curl, plus 1.6%, which has consolidated the 27% same-store growth from Q1 last year. Pleasingly, online channels have been strong, up 34%, with Rip Curl up 11.2% and Kathmandu up 58.4%. As previously signaled, COVID in Q1 has had a significant impact, particularly in our New Zealand, New South Wales and Victorian markets, and also the impact without any direct government subsidy has been recognized in the same quarterly period has led to an impact of about $35 million versus the prior first quarter of last year. However, we are now seeing positive momentum in the short period since reopening in our key New South Wales and Victorian markets. And we expect we'll see similar in the Auckland market as that opens up shortly. In terms of outlook, Kathmandu and Rip Curl are well prepared for the key Black Friday and Christmas trading period upcoming. Inventory remains sufficient to meet this demand overall. Due to the uncertain COVID trading environment, we won't provide any future forward guidance. However, as mentioned previously, as markets reopened, trading is expected to improve and there's significant growth opportunity, particularly in the second half, as we hopefully cycle a full period of opening. A key priority remains for our brands to maintain an increased investment in marketing, sustainability and loyalty to support our Build Global Brands strategy. Supply chain continues to be challenge globally, particularly impacting the flow of products into our North American markets. Oboz product deliveries will be impacted in Q2 as Vietnam footwear factories slowly ramp up production following closures in Q1 due to COVID. Demand for Rip Curl wetsuits continues to exceed available supply. And finally, freight, logistics and raw material costs remain elevated as the outlook for supply chain remains challenging. And this we managed where possible through pricing and raw material substitution. That's all for me, Michael.

Yes. Thanks, Chris. Just to wrap up, I mean we're really excited by the opportunity of getting our stores finally opened in Australia and New Zealand. We're seeing really good momentum when those stores open and with that return to more normality. So we're excited that just getting back to normal, to be honest. We think our brands are really well placed to realize their potential. And with that, we're going to pass on to each of the brands in turn. We're going to start with Rip Curl. When I was lucky enough to get the group CEO role, we had a number of internal and external candidates that could have possibly taken the CEO role at Rip Curl. Certainly, Brooke Farris was a standout in that process. Myself and Brooke have worked together here at Rip Curl for the last -- over 10 years now. And certainly, I'm very comfortable that the Rip Curl business is in very good hands. So with that, over to you, Brooke.

Thank you, Michael, or otherwise known as MD to all of us. Yes, 3 months in the CEO role for me, but 20 years in the surfing industry or 28 if you include being sponsored by Rip Curl during my competitive years and working in surf retail in Western Australia. In my 11 years at Rip Curl, I've worked across 3 of our major departments, being marketing, e-commerce and product. And I joined our global executive team 5 years ago when I dove into what was a new role being the General Manager of Digital. So I was tasked with setting up digital and e-commerce as a focus area for future growth. I then moved into the General Manager of women's role. Now our common denominator through that time was our group CEO, Michael Daly. So I bring to the role both my experience. And together with a really strong partnership with MD. The personal vision that I'm bringing to the CEO position is to establish a conscious and engaged environment where purpose is the core motivation of everything we do every day. And for me, that purpose is our crew, it's ESG, it's our customer through unified commerce and Club Rip Curl. It's making quality surf products and all of these are key areas and activations that feature heavily in our 3-year plan. Next slide. Thanks, Sheri. Now the Rip Curl brand itself has a very clear vision that was set by our founders, and that is to be regarded as the ultimate surfing company in all that we do. Now ultimate means the best, the best products, the best events, the best athletes, the best service, the best brand message and the best crew of people. And in the words of our founders, the ultimate surfing company should certainly be 1 of the biggest and operate all over the world wherever there are people who feel the spirit of surfing. And this is what we aspire to be, still to this day. Ultimately, we aspire to be the world's #1 surf brand. That's #1 in brand recognition, and that's #1 in both turnover and profit. Next slide. Thank you. Now that growth will come from a continued focus to execute our 3-year plan. That includes remaining true and authentic to our surfing roots. So on screen here, that little slither on the left there, that's the old bakery where we started in Torquay. And you know what, we are still here, albeit in a much bigger building with a lot more staff. And to be #1, we must remain true to who we are. We must maintain and grow our presence in all of the beaches and surf roots around the world, both physically and in the minds of our customer. The second pillar of our 3-year strategy is fanatical dedication to market leadership in core products. Now that's the best products, particularly across our core products of wetsuits, swimwear, board shorts, equipment and watches. Here, it's all about leading with innovation and technology. And finally, an intense focus on exceeding our customers' expectations through digital acceleration, as MD has already spoken to. Here, it's a real investment in the truly world-class unified commerce experience. Now all of these strategies support our position to be a technical, premium full-service brand marketing company that's brought to life for our customers through multiple channels, that being wholesale, retail and e-commerce. Thanks, Sheri. And looking at our first pillar of the strategic plan, being remaining true and authentic to our surfing roots. Now COVID lockdowns have inspired a 30% increase in participation in surfing in Australia. And we've seen like updates -- sorry, uptakes in key regions around the world, particularly in Europe and the U.S. So through remaining true to who we are, we've been the first brand that people of all ages have turned to, particularly for a new wetsuit and for many of their beach needs. So in bringing this strategic pillar to life, we do so through our team and events, through content creation and ultimately through sustainability. Now sustainability has always been inherent in our company and brand values, in particular, community and environment. And that, for us, is actively contributing to the local communities in which Rip Curl has major offices, especially with respect to maintaining the local environment. Now just a few weeks ago, as we came out of lockdown, we held our 21st Rip Curl Planet Day here in Australia, where our crew planted trees and removed weeds in our gorgeous coastal community. And throughout those 21 years, we planted 100,000 trees with 80% survival rate. So something that makes it still connected to the community, but also to each other as a team. In looking at our brand value of respect, this is about respect for the environment in which we search and respect for each other and all humanity. And this really talks to what we're doing in terms of B Corp. Now we're so fortunate to have Kathmandu holding our hand as we go hard for B Corp accreditation and finalize our 2025 ESG strategy. We've also been moving pretty quickly in this space by launching our wetsuit recycling program with TerraCycle. We've completed the Toitu carbon emission certificate to kick-start our carbon offset projects. We've achieved a B in the Baptist Ethical Fashion Report, the highest in the surfing industry, and we continue to improve the sustainable fabrics in our product collections. Looking at content creation. Now here, it's all about driving brand inspiration and traffic across both owned and athlete channels. Our content is made up of campaigns, product innovations or where we bring an order life on the search, which is about putting the world's best surfers in the world's best waves. Now this content that we create, we disseminate through our social channels to over 5 million followers. And looking at our content views across Facebook, Instagram, Twitter and YouTube, not including mainstream, we've had in excess of 69 million views over the last 12 months. Our surf is our reason for being. So this again reaffirms our authenticity to our customer. In team and events, our surf [indiscernible] is a program which onboards 8,000 beginner surfers around Australia each year. So a proud sponsor of this and then working all the way through to our world's best team, where we have 3-time world champion Mick Fanning, 2-time World Champion, Tyler Wright, Bethany Hamilton and then the recently crowned 3-time world Champion, Gabriel Medina, all riding with that Rip Curl logo proudly on the nose of their surfboard. We have an incredibly strong relationship with the World Surf League, the governing body of our sport. And next year, we really look forward to welcoming back the Rip Curl Pro Bells Beach, the longest-running surfing event in this sport. Next slide. Thanks, Sheri. Now something new for us this year was taking on the naming rights of the Rip Curl WSL Finals, which were held in the U.S.A. Now this is a key strategic move for us to grow the business and brand in North America. Now this day included the crowning of both male and female World Surfing champions in a single day of surfing and it drew 6.8 million video views across various live streams. The video on demand is still being watched to this day with 3.5 million views to date. And we think that's people wanting to relive Gabriel's that's Gabriel, who you can see on the screen here. Now this is absolutely us taking out a surfing in the U.S.A. and a key component to us becoming #1 in this region. So let's take a look at some of the video highlights. Thanks, Deanna. [Presentation]

So that is a whole lot of Rip Curl in your face. Our on-the-ground presence was incredibly clear and at 6.8 million live viewers social media impressions of over 300 million, together with linear distribution and mainstream media, we absolutely owned the most watched ever event in surfing. And we'll continue to own this event for the next couple of years. Next slide. Thanks, Sheri. Looking at fanatical dedication to market leadership. Here, it's about innovation, women's, kids and 365-day relevance as key growth areas for us. Innovation, it's all about remaining as the industry leader in technical products for surfers and beachgoers. This is wetsuits, board shorts, swimwear, apparel and everything you need for the day at the beach. Looking at women's, our objective here is to grow the women's brand to 50% of total sales. While we're 52 years young as a brand, women's at Rip Curl really only launched in the early '90s and has been the fastest-growing division of the past 10 years. So in looking at growth here, we'll do this by the evolution of our women's brand, creating products with purpose and a real internal focus on engaging a unified mindset. Our quality is front of mind, and we are a brand for all regions. And we will reflect this through our behavior and our culture. Globally, our business combined is 65% men's to 35% women's. So that highlights the incredible runway that's ahead for us. Looking at kids, it's something that we've always done, but we really saw this as an opportunity for significant uplift. And when you look at the total addressable market of beach parents in Australia of 3.7 million, that just shows you the incredible potential we have to own this division and category. So here, we've really disordered resource to kids. We are offering a deeper and equal offer across girls and boys brought to life with our junior surf team riders, of course. So with our quality kids apparel and wetsuits, it really is an opportunity to recruit that next generation and have them grow up with us. And finally, on 365-day relevance, so we own the summer, and now it's all about owning the winter. And we're doing this with the help of Kathmandu, particularly when it comes to fleece and jacket innovation. Our product offer is incredible. And right now in the Northern Hemisphere, demand is outstripping supply as our strong sell-through results continue. Now the all ultimate surfing company is 1 that demonstrates market leadership in both hemispheres all year round and achieving this remains our focus. Together with that momentum that we're seeing in surf, we are committed to capitalizing on this. Thanks, Sheri. And looking at exceeding our expectations of customers through digital acceleration, something I'm incredibly passionate about. I'm really excited about the progress we've made here in the last few years. Looking at unified commerce, that's our seamless and world-class experience between in-store and online. It's our omnichannel by click-and-collect, endless aisle and in-store fulfillment. As MD has spoken to, it's an active space, and we're definitely coming in hot here. Looking at e-commerce execution. This is a continuation of our platform upgrades, making sure we're active in all geographies, an improvement in our marketplace solution in the U.S. and Europe and ultimately launching here in Australia. And looking at customer experience in every week and day, continuing to identify where there might be shortfalls and fixing them with our customer-first mentality. And finally, Club Rip Curl. This one is super exciting, launching our membership program in early 2022. Our vision here is to have the largest and most engaged surf and beach community on the planet. And our objectives being to know our consumers, to drive incremental frequency and to build a connected community. It will be a program that offers ways to earn points in a way that's truly unique to Rip Curl, and we're excited to share more about that in the new year. So in summary, we're investing in the now, and we're investing in the future. It's respect for our history, our vision and our mission. It's knowing that we have full price premium, multichannel business. It's a focus on being #1 in Australia, U.S. and Europe, and of course, globally. And now that wraps things for Rip Curl. It is my pleasure to introduce Amy Beck, President of Oboz. Since joining together with [indiscernible] the hiking trials in Yellowstone with her dog, Pippa. So here to talk us through what's ahead for Oboz, Amy Beck.

Thank you, Brooke, and thank you to the investment community for the opportunity to speak to you all today about the Oboz brand, our momentum and strategies to continue to fuel our growth. My name is Amy Beck, and I'm the President of Oboz. I've been with Oboz since April of 2019 and had the great opportunity to meet many of you in person when we were still traveling the globe. I spent about 13 years with Smartwool and Lucy Activewear, both part of the VF Corporation. And I currently live in Bozeman, Montana, where our company is headquartered. And as part of our name's sake, Outside plus Bozeman equals Oboz. So I'm going to spend a little time talking to you a little bit about Oboz. This is our compass. It guides everything we do, from building great fun in footwear to how we give back to our community and the way we treat each other and the planet. It's a mindset that grounds us in what's most important, doing things the right way, having fun and exploring our path in life because anything else wouldn't be true to the trail. And our compass points, being true to our people, true to the experience that you actually get to experience when you wear our product, true to your foot because we do make footwear and true to our community are all key pillars in all the decisions that we make. And as Michael and Chris spoke to and Brooke spoke about to, our ESG goals are paramount into our path to success. We have partnered and it has been part of our DNA since we were founded. We've partnered with Trees for the Future. And over the last many years, have planted well over 4 million trees and have this as part of our commitment to our community. Next slide, please. Our mission as a brand is to create transformative footwear for adventure seekers seeking true experience on any and every trail. This is very critical to our competitive promise around fit, driven by intentional design, dependable performance and optimal versatility. It's the ready for anything comfort and confidence that fuels advance. Our purpose, why we do what we do is to empower the people of the world to blaze their own trail. These are our guiding lights and our opportunities for continued growth and success. Next slide, please. So this is a visual of our growth since acquisition in fiscal year '18. As you can see, we've had great growth over the past few years and are on a path to USD 100 million. Despite all the challenges we have seen over the last 18 months, the Oboz brand is stronger than ever as more people are going outdoors for their mental and physical health. The demand for authentic quality products to get them outside is high. Here in the U.S., participation is climbing with new consumers interested in the outdoors, camping and hiking, business has grown in all channels. Statistics from a 2021 outdoor industry participation report shows new participants are more likely to be female, younger, living in urban area and slightly more ethnically diverse than existing participants. New participants primarily sought socially distance outdoor activities in order to spend time with loved ones safely, to exercise, stay healthy, reduce stress and screen time fatigue. And new participants are largely motivated by outdoor recreation opportunities with low barriers to entry that are available and accessible within 10 miles of their home, including walking, running, biking, and hiking. This places Oboz well for strong growth over the next few years as we have our sights on $100 million. This growth will come from growth in our core and new categories, building our one-on-one relationship with our D2C -- within our D2C channel, expanding the brand internationally while growing outdoors in the U.S. and Canada and also growing within our current distribution. Our forward order book is strong and our demand is exceeding our supply at this time, given the challenges Chris spoke to, but we are well poised to recover and drive this strong business forward. How are we going to do this? We're going to do this through capitalizing on the brand strength and the strength of new participation in the outdoors. We'll be elevating our brand voice to drive broader awareness through investment in digital, enhanced retail experiences, better and more timely consumer insights and our continued commitment to service. We launched our D2C site in April of 2020 and have yet to see full potential due to limited supply. But our early indications are we have an incredible runway. The consumer now more than ever wants to have a one-on-one relationship with the brands that they engage with, and Oboz is no different. And through engaging content, enhancements to Oboz experience like prerelease, presale, gift cards, enhanced video and content, we are planning a strong growth within this channel. In addition, since we are primarily a wholesale business, the enhanced in-store experiences and partnerships with our retail partners are incredibly important to our runway, both from an awareness perspective as well as an engagement and conversion perspective. Branded environments showcasing the full Oboz range with brand signage and storytelling as well as new campaign activations through windows, signage and staff engagement and fitting environments to push our priorities and fit will be critical as we continue to grow. And our investment in digital engagement to grow awareness is also working. Our impressions are up as well as our engagements, our total audience and our video views. This is a path as we try and connect with younger, more diverse audiences to grow the Oboz brand awareness. We're also focused on our product evolution and expansion. Building on the core and franchise optimization is critical to engaging our existing consumers and finding new consumers that love the passion of the outdoors. Growing closet share of existing consumers through new products and new categories as well as gaining new consumers through these new products and new channels are critical to our growth. We're launching the next generation of our #1 franchise this spring with the Sawtooth X, and the excitement and the demand for this product has exceeded all of our expectation. Bookings for 1 season have outpaced the shipments for the entire fiscal year demand of last year by 15% and have grown our core year-over-year by 38%. Showcasing reimagining core business drivers to improve on fit, function and updated modern esthetics is well worth it. It's also critical that we grow new products within new channels and with the new consumers. And it's been working for the brand as well. As we talk about new participation, more likely to be female, younger, slightly ethnically diverse as well as living in urban areas, expanding our product reach to be more relevant to those activities will be critical as well. And our new product category growth has been grown 60% over last fiscal year and well over 100% to the previous fiscal year. So in summary, the Oboz brand is strong and our runway for growth is high. Oboz's authenticity, quality and commitment to service place us well against our competitive set and will support our path to $100 million. By investing in awareness, product expansion and innovation, our ESG commitments and our focus on people and values, Oboz is well placed to be the #1 choice for trail-ready footwear, enhancing existing and new consumers' experiences in the outdoors. With that, it is my pleasure to introduce Reuben Casey, the CEO of Kathmandu, to share with you the transformation of the Kathmandu brand and the excitement surrounding it. Thank you.

Thanks, Amy. [Foreign Language] Hello, everyone. It's so great to be able to spend some time with you all today and talk about the journey that we are on. I've been with the business for over 11 years in various roles, but lucky enough to be the CEO of the Kathmandu brand for just over 2 years now, starting with bushfires in Australia and then straight into the COVID pandemic, so certainly been an eventful time. I'm really excited to share with you what we've been doing, how we've transformed the team and share with you our aspirations and visions for the future. We talked often about the global opportunity that exists for Kathmandu outside of Australia and New Zealand. And it's large. The total addressable market globally dwarfs our market here of 30 million people across ANZ. However, one thing that was clear to me was that we needed a transformation, particularly in brand and product, to be successful. We didn't really have a clearly enough defined, point of difference in our brand, and our product didn't stand out enough on the global stage. And if we were to make this metamorphosis from an ANZ direct-to-consumer brand to be successful in what is a hyper-competitive global market, we absolutely needed to stand out, and we needed to raise the bar. And that began with our people. Thanks, Sheri. So here's our leadership team. And we've made a couple of key appointments in the last couple of years. Firstly, hitting up customer brand and online. Eva Barrett joined our team in March 2020. Eva had a week in Christchurch and a week in Melbourne and then straight into lockdown and has been there pretty much ever since. But we were so delighted to welcome Eva into the team. And Eva's been instrumental in resetting our brand and online offer, which she will take you through a little later. Eva brings global brand-building expertise and experience that we simply haven't had internally before, and it's helped drive a fundamental shift in thinking brand first. And then shortly after Eva heading our product, we're so excited to help welcome Robert Fry to the team. So Robert joined in April 2020. And due to the vagaries of COVID, worked from his home in Utah for 10 months. And as Robert would say, drinking from the Zoom firehose on a completely different time zone. So it's a tremendous effort, and we're so grateful for Robert for making that commitment. And Robert brings global brand experience from North Face, Mountain Hardware, Black Diamond. So again, bringing to the team a level of experience and expertise we hadn't had previously. And Robert and Eva have also attracted other talent into their teams. So step by step, we're continuously raising the talent quotient of these 2 critical areas of the business. And then most recently, Alex joined us just 3 weeks ago to head up our international efforts. So Alex also brings international brand experience with Adidas and O'Neills in Europe and most recently as part of the global leadership team for Icebreaker. So we've got the strong team built up diverse in nationalities, diverse in gender, diverse in ages and with a good blend of brand and retail experience and critical expertise in functional areas where it's needed. So as part of our transformation, we reset our brand purpose, our vision, our values. And here's a short video on where we got to. [Presentation]

So Kathmandu exists to improve the well-being of the world through the outdoors. This is our [indiscernible], our purpose. And these are the deep roots that give life to our brand and culture and the glue that unites us and our North Star. That comes to life, first and foremost, with our customers. Given that we know it's beneficial to spend time outdoors and commit with nature. We know it's good for our mental well-being. We know it's good for our physical well-being. And so we want to encourage as many people as possible to get out there. Our teams, our customers, all of you. We are a B Corp, which means we strive to use our business as a force for good and provide a beneficial impact at every touch point of our ecosystem. So we fulfilled this [indiscernible] through standing against modern slavery and protecting the most vulnerable human beings in our ecosystem, who are the wonderful people that make our products. We improved the well-being of the world through an engaged team culture, positive employment and development for our teams, through embracing diversity, through minimizing our environmental footprint, through continuing to lead in terms of sustainable products and through striving to have a positive impact on the communities we operate in, and of course, through generating positive returns for our shareholders. Thanks, Sheri. As we think wider than Australia and New Zealand, we dream of being the world's most loved outdoor brand. And this speaks to our global ambition. This speaks to our -- to create an emotional connection with our customers and consumers. And it Speaks to our brand ethos, which is about focusing on how the outdoors makes you feel, not what we achieve while we're out there. The benefits to our well-being, the deep joy and sense of connection that we get from being out there, and of course, the simple pleasure of being outside. We also reset our values from what was potentially a quite staid corporate generic value set historically. And this is the essence of who we are as Kathmanduers. The guy is how we treat each other, defines the spirit in which we approach things, how we interact with customers and more authentically reflects our culture. So as Kathmanduers, we are courageous. We are joyful and we are open. And we firmly believe that we are stronger together. So that's really the essence of the Kathmandu brand. But what next? So as we think ahead to coming out of this current phase of COVID, we see tremendous opportunities for growth ahead of us. Now starting with Australia and New Zealand. As society recovers from COVID with a phased return to international travel, we are a clear destination of choice for customers to gear up to enable this. As we grow our year-round relevance as a brand, while continuing to build on our strength in winter, we will add growth in summer and transitional seasons, and we've started this process this very summer. Also, we continue to invest in long-term brand equity versus historically a focus on sales and promotion periods. And we need to build that long-term growth runway, not just rely on performance marketing. And we'll continue to optimize our store network in Australia and New Zealand. There will be opportunities for incremental growth where population has grown and also relocating stores to optimize the network, as Michael referenced earlier. We also see strong growth coming through digital to a $100 million business, which will be about 20% of sales at that point in time and lightly beyond over time. We've also made great progress recently in transforming how we show up online, and we'll continue to develop our seamless cross-channel capabilities to best serve our customer. Every experience our customer has forms an impression of the brand. And so we strive to ensure it's a world-class experience at each and every step of their journey. Whether it's online, in-store or between the 2, we build that emotional connection with customers and build trust as we provide that world-class experience that exceeds customer expectations. And I see this regularly, customers bringing gifts for our store teams to say thank you for helping them so well. And then turning to international. We've set ourselves a target to grow by $100 million over the next 5 years. Europe and Canada are our immediate priorities, followed quickly by the U.S. and in South Korea and Japan. And our long-term aim is to maintain or achieve a balance between Australia and New Zealand and our international markets. And as I said earlier, as we go about building the world's most loved outdoor brand and enter international markets, we need to show up with a brand that's meaningful and differentiated. The work we've done that Eva will take you through defines our tone of voice, our target millennial outdoor enthusiast consumer and how we activate in the market will be aligned with this point of view. An example of this is the zip line activation we held in Sydney as we launched winter this year. We show up with the joyful, carefree, out there attitude and build that emotional connection with our target consumer. On its own, that's not enough. We also must have products of desire that are relevant to our consumer and yet exceed performance expectations. And Robert will talk more about how we are doing this. There are some absolutely amazing products coming down the pipe. And we'll keep pushing on leading the industry with innovations centered on sustainability. We know that our millennial outdoor enthusiasts regard sustainability as extremely important, and we will match up to that expectation. When it comes to target markets, we held our global sales meeting just 2 weeks ago, and the teams in Europe and Canada are off meeting with customers, selling them autumn winter '22, which means taking orders for delivery in August, September 2022. And France, Germany, U.K., Ireland and Canada are markets where we have dedicated salespeople or sales agents or a combination of. And we can leverage the Rip Curl infrastructure in terms of legal entities, customer service, warehousing, back-office functions, which is a tremendous step-up for us and benefit for us. We have a team that's really hungry for success and genuinely excited by the opportunities to grow the brand in those markets. In terms of our assortment, it's a focused assortment based around our key apparel collections, which is our spearhead, supplemented with a limited range of equipment. In outdoor, apparel really is the biggest opportunity long term, and it's our natural strength. So that's what we lead with. For this, we quickly follow up with the U.S. and then Japan, South Korea are next on the list in terms of Asian markets. In terms of channels, we will have a D2C digital offer in market to support our brand positioning, and this will be a full price model to support the wholesale business push. And in terms of distribution, we are aiming to build up long-term brand equity in these markets, which means selective distribution initially to make sure we're with the right retail partners to build the brand. And over time, we'll look to go wider and accelerate growth as brand awareness grows. But it's critical to get the right product assortment and the right retailers to reach the right consumers. So careful product and distribution segmentation is absolutely key. But just to finish up, our brand vision value's purpose has been reset completely, and this is part of the process of building this meaningful differentiated brand. We have absolutely a long-term runway through international, and ANZ provides short to medium-term growth opportunities as we come out of this COVID period. Our digital business has grown very strongly, and we have a strong team in place with international brand building experience to make it all a reality. Thank you. It's enough from me, and I'm very delighted to hand over to Eva, who will take us deeper into our brand transformation journey. Thanks, Eva.

Thank you, Reuben. Hello, everyone. My name is Eva Barrett. I'm the Chief Customer Officer here at Kathmandu. And I'm absolutely thrilled to be part of the leadership team here. And just over 2 years ago, I met with Reuben in Germany where I was based. And I've spent the last 15 years leading marketing and brand teams around the globe, so in the U.K., in the U.S. and across Europe. And when Reuben outlined his plans for the brand, I was truly excited. I thought, what an amazing opportunity we have here to build a global powerhouse. I had such great nostalgia for the brand, growing up in Australia. I remember the first store in the '80s. And also, my mother is from New Zealand, so half of my family is from New Zealand. And so I felt so firmly about the brand, which is a big call, which has great values. And Kathmandu invented the first Ecofleece back in 1991. And that's before eco was even a theme. So it was a very exciting opportunity to think about. And that's very much why I joined. And today, what I'm going to talk you through is the brand transformation journey that we're on. So firstly, as Reuben touched upon, what we're looking to do is we're looking to build a meaningful, differentiated global brand that is set up for global and local success, a brand that is consumer-driven but is also part of culture. And the culture part is important, and I'll talk through shortly why that is. Secondly, the digital transformation journey that we're on, the journey to be truly omnichannel, to provide great experience, and to focus on building our loyalty club, and also personalization. And all of this correlates to profitable growth, driving profitable growth. And we'll be doing this through building brand love, creating products of desire that Robert will talk you through and creating incredible experiences for the brand. So what I'd like to do first is start with the category because, of course, to summarize the category is what represents the opportunity for growth. And I'm pleased to talk about that the outdoor category is no longer niche. It is no longer just top of the mountain. We have a wonderful opportunity here because of some of the trends that are happening within society right now. The category itself is worth $170 billion globally. And that's being driven by a couple of factors. Firstly, consumers' obsession with health and wellness. More and more, we all realize the benefits of getting into the outdoors. The mental, spiritual and physical benefits of just getting out there and how good it makes you feel when you're out there in nature. Secondly, consumers are no longer linear in how they shop. They no longer just shop on in outdoor or just shop in surf as Brooke talked about. What we're seeing is a complete blurring of lines. So consumers now mix up vintage and street and outdoor and fashion. And what that is creating is a much, much bigger opportunity for us. Another trend that's driving it as well is the increasing casualization of the workforce. I'm sure many years ago, you would not have even thought of wearing sneakers to the office and then a puffer vest at lunch time. But that's exactly what's happening, increasing casualization. Then next to that, consumers' relationship with the outdoors has evolved. As part of our brand strategy work, we looked at 35 global brands across the world. And what's clear is that in the outdoor category, the dichotomy is you're either hypermasculine, top of the mountain, all about pain and suffering or you're very preachy and worthy. And so we have found an incredible whitespace for us. And all of this links back to these insights here. And the insight is that the outdoors used to be about conquering, to get to the top of the mountain. It's about that pain and that suffering. But actually, consumers' relationship with the outdoor has very much evolved through a much more restorative point of view. It's about having a reciprocal, respectful relationship with the outdoors. It's about getting into the outdoors to belong and feel part of that nature, not to conquer nature. Slide, please, Sheri. And if anything, the pandemic has only accelerated this further. More and more people have discovered the balance of mental and physical well-being from exploring outdoors. And the biggest demographic, Gen Z and millennials. 65% of millennials and Gen Z now think it is essential to get into the outdoors for their well-being. We're also seeing participation rates increasing, As Amy stated. Within U.K. the rambling society has seen a 30% increase with hikers. And in the U.S., American National Parks have seen a 90% increase in visitation rates. Now that's an additional 8 million people that were not hiking in the previous year. And of course, all of this means is that this will change the future of where they spend their money. Booking.com have found that the highest search terms that they are receiving are about hiking and nature. Next slide, please, Sheri. And so all of this places us in very good stead for growth. So Reuben talked about why our brand exists, our North Star, our higher purpose. And that is to improve the well-being of the world through the outdoors. But how do you want people to feel? Is we want people to feel the joy and the fun and the benefits of the outdoor. We want everyone to realize what they're missing out on if they're not already there. And that is the fact that nature changes your brain for the better. Next slide, please, Sheri. But when we think about our consumer and our consumer growth strategy is that we know from research, and we conducted a comprehensive research, qualitative and quantitative across 6 markets across the globe, is that the biggest opportunity in the outdoor category by spend, size and participation is its millennials 25 to 34 years old. And yes, historically, we have underindexed with them. So therefore, to grow the brand, what we need to do is to continuously bringing new people into the brand, whilst retaining relevance to our core audience. And this is how we will grow. Next slide, please, Sheri. So part of that qualitative and quantitative work. We started with attitudinal study. So not by activity, but very much taking this from a psychographic point of view. Because what we're trying to understand is what are consumers motivations to go outdoors, and I've just talked through quite a few of those. What are their attitudes to the life and to the outdoors. And then what does that mean for us as a business? What does that mean for us as a business in terms of the role that we play in consumers' lives. And then what are their attitudes to outdoor clothing? And how is that evolving as well? Because all of these insights provide great insights across the business to our product teams as well in terms of how they're going to design. All of this enabled us to identify and build up the profile of our millennial outdoor enthusiasts. And this is our core consumer. And what we know about them is that the outdoors is a huge part of their life. They have a deep desire to connect with nature. And also, they very much care about brands that share the same values as them. They care about sustainability. And the fact that we are a B Corp, the fact that we are creating these products of desire and that we have an authentic history in the outdoors since the 1980s, places us in really in a good position to be relevant to this consumer. Next slide, please, Sheri. The good news is that we have an amazing starting point. So this is our brand health data. And the key message I want you to take out of this is that we are the #1 outdoor brand in Australia and New Zealand. We are the most dominant brand over our competitors. And what that means that we also dominate consumers' predisposition to purchase. So we lead total awareness, consideration, currently purchase and also in preference. But what's important as we build the brand of the future, is that we reduce our reliance on building our brand through performance marketing through promotions. But we are focusing on building brand love. And of course, therefore, higher price points, higher margin, higher growth. Next slide, please, Sheri. So we relaunched our brand back in May. And this is really exciting. We spent a lot of time since I joined almost a year ensuring that we had our brand strategies spot on. We launched our brand positioning, our values, our purpose, as Reuben touched upon. And we launched our brand platform we're out there. And we went to market with an integrated campaign across multiple touch points. And what we can see from this is that, firstly, the message has been really well received. We are on the right path as a brand. It's clearly communicated our new positioning and our new strategy, and it has driven brand affinity and consideration amongst our target audience is 25- to 34-year-old that we historically under-indexed with but also with our wider 18- to 54-year-old audience, too. We drove over 80 million social impressions and over 30 million views of our content. Next slide, please, Sheri. The slide that you are viewing here, this is post campaign analysis. So in blue, what you're viewing is those who have not seen the campaign, and in gray is those who have seen the campaign. And you can clearly see across both markets is that we are increasing our brand metrics for those that have seen the campaign. So the message I want you to take up from this, if those that have seen the campaign, they feel much better about the brand, that they feel inspired to get outside more. And they see how we as a brand can improve their well-being. But also when you think about those purchase metrics, it's those that have seen the campaign are driving configuration and also are more likely to purchase from us as well. So really, we are on the right track here. Next slide, please. And we're just at the start of this journey of building a global, meaningful, differentiated brand. Right now, we're live in all of our stores with summer. Because historically, what we've been known for as a brand is a more winter brand. And we've been known for our puffer jackets. But if we're going to grow, we need to be known for a brand that is relevant for all year round. So we've just launched summer working with musician, G Flip. They're really being targeted to this younger audience. And we've also just launched our first collab with an artist, and his name is Mulga and he creates great work. And I encourage all of you to get online and have a look at this amazing collab that we've just brought to life with Mulga. And now Deanna, if you could please share the third set in television commercial that is live nationally across Australia now and across all of New Zealand. [Presentation]

And next up is winter, winter for next year. And this is a really exciting 1 because this is completely in line with our values as a B Corp, our Bio Down Jacket. And I'm not going to steal Robert's thunder here because he has so much to talk about with this jacket. But we have a really exciting story to bring to life globally, working with a lot of partners to really drive brand heat about this amazing eco innovation story. Next slide, please, Sheri. So now I'm going to take a slightly different shift and talk about our unified commerce journey. So how do consumers like to shop now? I like it, I want it, I got it. And that's from Ariana Grande, but that is exactly how consumers expect to shop. Consumers' expectations have never been higher when it comes to a great omnichannel experience. They no longer want just a great experience online, easy checkout, being -- great shipping. They expect it. And so the bar is much higher for all of us and especially when it comes to younger consumers who are not just shopping online, but we see the growth of social shopping. And consumers no longer see channels. What they see is experience. Next slide, please, Sheri. So Chris talked about our incredible online growth. And this is not by accident. We did a best-in-class review of websites when I first joined the brand. And we took a critical view of ourselves. And we looked at what our customer pain points were and where we had to improve. And what's important about this message is that this is a continuous improvement story. We should never stop when it comes to creating a great experience for our consumers. So we completely relaunched our website, and we built it mobile first because that's how we all shop nowadays, isn't it? Mobile first and making the checkout experience and making the purchasing experience and the conversion experience much more seamless, much more engaging and at a much better overall experience. Next slide, please. So we refreshed the design. We brought in a lot of features that we've been missing such as 360 product videos because ultimately, you want to just be able to get online and see a 360 of a tent and see how easy it is to pitch that tent and improve checkout experience and also true rating NPS as well. So we can hear directly from our customers, see directly what their pain points are and work on improving that. This also involved a complete overhaul of all our photography. On the left is how we looked previously. On the right is how we look now, much more engaging, much warmer. And ultimately, what this does, it increases our sales and it reduces our returns. Next slide, please. And this is just the start of our journey to build customer lifetime value. We have an incredible opportunity with our loyalty club. We have 2.1 million summit club members. Now this year, what we're seeing is we're seeing the death of the third-party cookies. And what that means that you will start to see more and more retailers and businesses in general, not just retailers, total businesses starting loyalty clubs because they are all looking for your data because they cannot rely on third-party data like they used to. So first-party data has become king. And we are in the fortunate position that we already are much further ahead than a lot of our competitors and that we have 2.1 million loyalty members. But that means that we can't stand still, and we need to create an even better experience for them. So I am so excited to come back to you next year when we relaunch our Summit Club, bringing it in line with our brand positioning and our brand experience and making it more than just a discount club, but having a prevalue exchange with our consumers and creating experiences for them in the outdoors, which is very, very exciting. Because we know that consumers are happy to hand over their data if there is a clear value exchange. And that's exactly what we're doing here. Next, we are building out a market stack. Sorry, Sheri, do you mind going to that one. Next, we are building out on our market stack. And what our market stack looks like is this is all about personalization. So building out a customer data platform and personalization so we have 1 single view of the customer and that we are able to be in the right place at the right time with the right offer in order to drive customer lifetime value. And this is how we will continue to grow as a brand, which is very exciting. So thank you for your time today. If we move to the -- next slide, there are 3 key take outs that I would like to leave with you. Firstly, we are driving brand heat and driving brand love. And we're doing that by driving relevance and consideration with a younger consumer, and we're doing that through attitude and emotion, continuously bringing new people into the brand, whilst not losing the focus on our core. Secondly, I am building a modern marketing organization to really drive digital transformation in marketing through building out experience of our loyalty club and through personalization. And thirdly, driving a growth culture. Because ultimately, that is what this is all about. All of the initiatives that we are taking to build growth for Kathmandu and increase brand love and our customer lifetime value. Thank you very much.

Thanks very much, Eva. And what I lack in Ariana Grande quotes, I hope to make up for in pretty pictures in the rest of this presentation. So forgive me for not having a fantastic Ariana Grande quote. Hi, everyone. My name is Robert Fry, and I'm a GM of Product at Kathmandu. And I've been here about 18 months. As Reuben intimated, I was 10 months in the U.S. and then been here in Christchurch for 7.5 months now. And I, like Eva, about a little over 2 years ago was engaged with the senior team here and talking about coming aboard. And I, too, saw this tremendous opportunity that was in front of Kathmandu, partly because of the tremendous respect I've had competing against Kathmandu in the industry over the past 20 years and understanding Kathmandu's incredible ESG and sustainability cred as well as the sort of product and functional cred behind the brand, but also thinking about taking all of that to the world and that sort of creative tension that exists between being the big dog in the home market and then being the underdog in international markets. I think that there's something dynamic and interesting to be learned through doing all of that. And both sides can share with one another. So I'm absolutely delighted. I feel like I just began my role here, even though it's been, I think, 19 months now. And I'm just -- well, I'm delighted to share with you what's next. So next slide, please, Sheri. One thing is if we're going to really make good on those goals that Michael, Reuben and Eva outlined brand, we can't do it doing things how we had done in the past. So we've got some imperatives in front of us that we're activating right now. The first and foremost, I'm a product guy, of course, I'm going to say this, but it's to design beautiful, desirable, differentiated product that has intrinsic value to our customer above and beyond the retail price that was paid for it. Intrinsic value is a key component in that conversation. The second part, because we're an outdoor brand, we've been an outdoor brand for over 30 years, we've equipped people for all kinds of conditions, we need to continue to exceed our customers' performance expectations around our product. It's not merely good enough to just show up with adequate product. We have to exceed people's expectations. That's a nonnegotiable for myself and my team. We also want to lead the industry in groundbreaking sustainability innovations. There's a lot in that phrase leading the industry. So we can't simply just check the box and presume that, that's going to be good enough. It certainly won't be good enough for our millennial-focused consumer because they understand what groundbreaking and leading the industry really mean, and they require that we innovate in this manner. And we have to do all of the above while maintaining competitive price points. And so frequently, when you talk about this kind of transformation, fear is struck in the investment community and senior management around losing our competitive edge at the price point level. And it's possible to have your cake and eat it too, and I'll show you -- I'll talk about that in a moment. But we have to do all 4 of these to be able to support those aspirations that are set in front of us. Next slide. Okay. I like to show this slide a lot because I think it illustrates adequately or better than adequately what we're trying to achieve here. Not long ago, and this is literally 7 months ago, we showed up in a market like this, like the products you see in front of you. They're not bad products. They're fantastic products, and that one there on the left keeps the lights on here at Kathmandu. And I'm never going to disparage a classic franchise products like the Epiq jacket that Ben's wearing on the left. But this is how we showed up in the world not long ago and approachable, the right price, the right level of performance but, ultimately, potentially dismissible. Certainly, when we're talking about courting an urban, cosmopolitan millennial consumer and certainly, when we're talking about going into a global marketplace, as Reuben intimated, hypercompetitive. You can't just show up with a pedestrian product. You need to somehow cut through the noise and show up with something better and different than the next competitor over. So next slide, please. This is a transformation that is afoot right now. This is autumn/winter product that you're looking at. Now granted, I'm stealing a little bit of the wonder and the creativity from Eva's fantastic marketing team because I've shot these in a fantastic way. But this is transformative product. These are products that are evolutions. They're friends in the line of our Heli franchise. So we've got a tremendous franchise in the business called the Heli jacket, and these are evolutions of that Heli jacket. They're friends in the line. They don't replace the classic silhouettes that we depend so heavily on, but they come into the line, sit alongside those classic silhouettes and invite in a new consumer. They help us acquire new customers. We've got 2.1 million Summit Club members and customers in our 30-million person marketplace here in Australasia. But even amid that 30 million person marketplace, we may not be acquiring those urban, millennial, cosmopolitan consumers to the degree that we'd like. So we've got growth opportunity here in our home market, and we need this kind of product to cut through the noise in international markets. Again, this doesn't replace the stalwart classic franchise platforms that we have. 2 of them, the Heli and the Epiq, account for a tremendous piece of our business, particularly in winter, but they come in and invite a new consumer into the mix. And those 2 consumers and those different products can coexist in the same space if we're smart about how we present, how we tell stories and do it in a graceful manner. So next slide, please, [ Sherry ]. Again, the sort of transformation, we want to be careful, obviously, about SKU proliferation and business efficiency. So when we identify areas in our line that aren't performing or aren't optimized to the point that we believe they could be, we'll pick off those elements of the line and redesign them going forward. Again, not touching that classic stuff that our core consumer has come to depend upon us for, but we'll take those adjacent styles that we don't think are performing to the maximum potential and certainly aren't helping us acquire new consumers and redesign those slots with a nod to a slightly more -- an open aperture around aesthetic. So next slide, [ Sherry ]. So those 2 products that you just saw on the previous slide have been redesigned for next May's launch to these 2 slides that you see in front of you. [indiscernible] is with a different vibe than where we've been in the past. And we do a lot of product testing and a lot of market testing with core consumers, new consumers, millennial consumers through a number of platforms that we have available to us. And these have been among the most well received new designs that we have coming to market next year. So we're quite excited to take these opportunities that sort of deadweight in the line and bring them to life. Next slide, please, [ Sherry ]. The same would go for something like fleece, right? So heavyweight fleece, high pile fleece that's having a moment in our marketplace right now. It's been going on for a couple of years. It shows no signs of slowing down. In the past, this is all we had to offer a consumer, essentially 1 silhouette with a relatively conservative journey and type styling. There's nothing wrong with this product, but how do we go and acquire those new consumers who are really keyed into this high pile moment in the marketplace? Most of the people who are buying these kinds of products in our marketplace right now are under 35, and they have an awareness around fleece heritage and an old school 90s look that they're keying into. So if we move to the next slide, you'll see friends of this high pile element in our line coming in next year on the right and the left. They're fantastic. They're fun. They're playful. They're just as legitimately outdoor as the products they sit alongside, but they invite in a new consumer who's never shopped with us before for this kind of product. And these are our most sort of colorful versions of this silhouette. We also offer the same silhouette in more conservative colorways to sort of bridge that consumer and bring the slightly less adventuresome consumer along for the ride. But these kinds of opportunities can exist alongside those classic franchises and open the aperture for many more customers come into the door and buy more from us than what they bought in the past. Next slide, please, [ Sherry ]. And the same would go -- I feel like I'm taking kind of a potshot at some of our classic imagery here, but the same would go for a classic silhouette like the 2 that you see here on the screen where, historically, we would have relied on the performance conversation around these jackets to sell the proposition of the jacket. It would have been that. And potentially price point. So we have performance and price without any other reason to buy the product, no reason about style, color, vibe, youthful mentality or any other attribute to assign to these products. So up until recently, we would have only relied on a performance conversation, and that would have been that. And that makes it really hard to acquire new consumers, particularly those consumers who aren't just looking at performance metrics when they're making their purchases. And so it potentially limits the conversation and limits the number of new consumers we can pull into the equation. If we go to the next slide, [ Sherry ], you'll see what if you could -- again, alongside what I just showed you, but what if you could have that class-leading performance around rainwear, but it also looked fantastic? This opens the door to a whole new set of consumers to come into Kathmandu and find what they're looking for and for us to make good on the promise around performance for them. But they would have never found this from us in the past. And so we see this as a tremendous opportunity. It doesn't disregard where we've been and it doesn't say anything to our classic consumer other than, hey, you might like this as well. So next slide, please. And typically, when we think of performance promises, we tend to think of warmth and we tend to think of rainwear protection, and we tend to sort of silo our conversation around those winter elements. But performance products can be summer oriented as well. We've been challenging ourselves as a brand to become more relevant in summer to our customer. And so how do you become relevant to your customer in Australasia in summertime and still make a performance promise? Well, you come to market with class-leading sunwear protection. And so the Sun-Stopper shirts that you see in the slide in front of you right now were just launched in the past 2 months, and they've immediately jumped into our top 10 and top 20 best-selling products in the mix for this summer because we know that everybody cares about sun protection, particularly the younger consumer. And this allows us to have a performance discussion with that customer in a summertime setting yet offer something that looks fantastic as well. So we can kind of tick all the boxes. Certainly, it's priced right and they fit right and they look great. And then Eva had mentioned it. She didn't steal my thunder because I think there's a lot of thunder here. But in winter, this coming winter in front of us, we're offering to the market, for the first time in all of human history, a biodegradable, 100% biodegradable down jacket, right? So no one's ever seen anything like this before. And we're the first that we believe to bring this sort of thing to market. What's the point of bringing groundbreaking sustainability innovation like this to market if it doesn't look fantastic, if it doesn't look desirable, if it doesn't look differentiated? We could have done -- we could have phoned it in and brought something that looked pedestrian and then relied only on the sustainability conversation to drive interest, or we could do it differently and differentiate ourselves by making gorgeous looking product that also had the performance promise around warmth and fit and comfort and the sustainability promise around groundbreaking sustainability innovations. And I think we have a cool video next. [Presentation]

Groundbreaking, right? The bio down jacket is made to 100% biodegrade inside of about 4 years when disposed of properly at end of its life. That doesn't mean we're supporting the idea of casting off an expensive beautifully crafted garment when you're done with it. We built it to last a lifetime. We built it to pass on from generation to generation. But when it reaches the end of its useful life, it can be disposed of and if properly disposed of it will biodegrade in a normal modern landfill and become -- not become a problem the way standard materials can be. And so is it the end of the road for us? No, not at all. It's a step in the right direction, and it's a way of getting us out of the petrochemical waste stream and into more groundbreaking, world-changing, life-leading solutions that keep us ahead of the competition. But it wouldn't make sense to lead the industry in groundbreaking sustainability innovations unless we were responsible world citizens up and down the supply chain. So we're famous for this. We're absolutely cutting edge in this space. And we're a key collaborator with really every industry-leading ESG organization. And because all this activity generally starts with product. Product is the prow on the ship as it were. We begin every business cycle with product, and product needs to be at the forefront of this kind of activity as well, meaning we have to choose the right suppliers. We have to partner with the right finished good factories to ensure that if we're making a beautifully sustainable garment, that we're also fair to the workers and fair to everybody up and down the supply chain. And this is one of the most important parts of the work that we're doing, and it's one of the reasons why I joined the brand. Next slide, please, [ Sherry ]. So when I talk about -- this is that fourth point from that list that I shared at the beginning. When I talk about maintaining competitive price points, that doesn't mean that we're always going to be the cheapest brand on the rack. But what it means is that we will be extremely conscious around the price buckets that we inhabit both in our core home market as well as abroad. But we can be better than the competition around us. We can improve the customers' experience through the touch points, the details, the manifestation of the products and how we handle on-product branding, how we handle trims, how we handle fit and features and the execution of the product. Those kinds of considerations, those kinds of details don't add or add nominal costs to the execution of the product to the final product. So they don't raise our price points, but they enhance the customers' experience and they enhance the value that the customer imbues into the product and into the brand. These are often overlooked. These kinds of details are often overlooked in the outdoor market. And we at Kathmandu are striving every day to not overlook that stuff. The little special details mean a lot to the consumer. The details matter, and we can do them skillfully and with precision to not impact our price structure and our margin structure. And in fact, if you add value to the product, intrinsic value, it gives you greater elbow room around your pricing structure. And so you're not always at the bottom of the scrum, bottom of the pricing scrum. So we're quite excited about these details. It's a fussy thing to talk about in a conversation like this, but it really matters at the transactional level for the customer. So final slide, please. So I listed sort of 4 activities that we're engaged in. They're top priorities. They're imperatives for us in product. And if we execute on those like we are and we build this beautiful product, we sort of go from an important and well-known and very successful regional retailer into a relevant sought-after global brand without losing that specialness at retail locally. And so I'm quite pleased about where we are in the process. And I'm even more pleased for everybody here on the call to see the product as it hits the market because I think that's the proof that's in the pudding. So I think that's it for me. And then I hand it back to Michael Daly. So thank you very much, everyone.

Thank you, Robert. So look, that's it for the formal presentation. Just a quick summary or wrap from me. The pandemic has definitely turbocharged the desire for people and the consumer to get outside. Our brands are very well placed to participate in that as the consumers are able to get back outside, which they clearly have been in more recent times. We're excited by Auckland opening up in the next couple of days, and certainly, our teams are very motivated to have what, well, we're hoping and planning will be a bumper holiday period this coming -- this next couple of months. So with that done, we're going to throw now to some Q&A, which [ Ron ] from [indiscernible] is going to pull up some of the questions in the chat. If you haven't put your questions in the chat yet, please do. We'll allow another 15, 20, 30 minutes as needed for questions, starting it up.

Thanks, Michael, and thank you, everybody, for listening in. [Operator Instructions] I will endeavor to cover as many as we can in about the next half hour. So first of all -- and I will also identify people so that the presenters know who is asking the questions. So first of all, and maybe this first question to you, Brooke. The question is from Alex Milton from NovaPort Capital. On Rip Curl, can you provide us with a bit of detail on the strategy to double sales in the U.S.?

Yes, sure. Thanks, Alex. Certainly, U.S. is a place I'm really looking forward to getting back to with our borders now opening. I guess what makes the U.S. unique is that we've really only been promoting and selling the brand there for 20 years or so. We don't have that long heritage and history that we have here in Australia. And as a considered brand, I think that started to happen about 10 years ago. So now we're sitting at around top 5, 6. And as I mentioned earlier, yes, the goal is to get to #1. We've seen some change of ownership amongst the majority of our competitors, and we've really seen this as an opportunity to lean in and lean into lifting the volume on what makes us unique. So being our vision, our mission, our values and certainly, our quality serve products rooted in that technology and innovation. There's also a real authenticity coming through for Americans, that trust and respect that comes along with being an Australian brand. So that's something that we will continue to talk about in this region. In terms of the growth, as you asked, it is doing what we're doing in the world of product. We've really found our feet in the last few years, understanding where our volume apparel opportunities are in North America. In terms of accessories, previously, we haven't really offered our own for -- well, our own Rip Curl made products for accessories. So here we're exiting some third-party brands, bringing in more Rip Curl products there. Kids is relatively new for us and also women's, that 50-50 goal, where the U.S. is actually leading in terms of that balance happening quickly for us. There's strong momentum in all of our channels. So that wholesale market expansion in North America being the #1 region for new business in FY '21, so that's super exciting. We opened 61 new doors there just in FY '21. So that is something that's showing that we've got that runway, the opportunity to break down and break through new doors. That direct-to-consumer and digital experience and acceleration, we've got a bit of catching up to do in marketplace and certainly launching Canada online and the omnichannel ambitions that you heard me talk about earlier. E-commerce in the U.S. is the fastest growing region for this channel. And that too, yes, will be -- the spotlight on e-com there will really bring it to life. And the retail store openings, there's several coastal opportunities for us in the U.S. and to increase our presence there. So that too will bring along some brand growth. And of course, our brand presence through the Rip Curl WSL Finals, whilst it is that 1 day a year where we crown a world champion, we will leverage that involvement across 365 days a year. And probably to round out on the U.S., we have an incredible leader in our President, Dylan Slater. He's been on a similar trajectory to myself through the business and brings a really strong outlook on innovation, on our premium positioning and certainly on full price and showcasing the branded products and all that we do. Dylan was also a former competitive surfer, so between he and I, we're pretty focused on that podium finish and aiming for #1. Thanks, Ron.

Thanks, Brooke. And maybe I'll direct the question to you, Chris, if possible. So we've had a couple of questions in from Cindy Yin, Forsyth Barr; [ Julia Wenger, Paradise ], just around the supply chain disruptions. And just wanting to understand, please, where are those bottlenecks? And how is Kathmandu addressing those bottlenecks, Kathmandu being the group entity, sorry, addressing the bottlenecks across the various businesses? And also how -- to what extent are you able to offset higher supply chain costs in product pricing?

Thanks, Ron. Yes. So primary ones are, in terms of the supply for Oboz with the factory closures in Vietnam, they're reopening out progressively. So it's not an immediate reopening as we speak, but they are [indiscernible] especially. So that's primarily going to impact Oboz in Q2. But -- and we are seeing that to be played out across the industry generally, especially in the U.S. So it's not a problem you unique to us. So the priority for the Oboz brand is to move forward into the Q3, Q4 period and to secure supply for that and maybe working very tirelessly with key suppliers in Vietnam to make that a reality. The other key area is primarily in some shipping delays. However, we have built in timings through our supply chain to deliver earlier where possible than we're normally wont to putt that gap where those delays in shipping occur. And then the other aspect is in Brooke Farris' Rip Curl, and it's a -- probably not a good problem to have. We're at capacity in terms of our manufacturing for wetsuits. There's been some impact in securing neoprene for raw materials. However, it's -- we're full stretched with our own factory and increasing hours to meet that demand. But that's a good problem for us to have. In terms of offsetting the cost impact, price itself is not a large cost in terms of our cost of product. And the future cost more in terms of raw materials. But primarily, most of the raw materials have been secured or FOBs have been locked in for this financial year. We do have the benefit of tailwinds with FX. So that will support margin for the rest of FY '22. And going forward, as we have the benefit of being a vertical -- all our brands being vertical with the benefit of managing through pricing actions and looking at raw material substitutions to manage those costs. So long term, we'll be able to manage the impacts and in the short term, the effects of the tailwinds to support FY '22.

Thanks, Chris. We've got a number of questions on Kathmandu. So what I might do is move them to be the last set of questions that we have. So get prepared Reuben, [ Diana ] and Robert. But I might go back to, if I could, to Brooke at Rip Curl. We have a couple of questions from Bianca Fledderus from UBS. It's around your strategy to increase women's product sales. So her questions are, increasing women's to 50% of sales, what is it at the moment. What's your global market share in women's at the moment? And as you grow that in women's, will you be taking share from peers like Roxy or will -- is it new sales growing the pie?

Bianca, thanks for your question. The balance globally is 65% men's to 35% women's. Though there's slight differentiations as we move around our key regions, and the closest in the U.S. being 55% to 45%. In terms of the growth, I would like to say is all grow together. I think that when the surfing industry is fine that we can all be successful together. But certainly, there's limited space in stores and yes, we'll be pushing in to ensure that our footprint continues to grow in wholesale, looking at optimizing our floor space in our retail owned stores and ensuring that we have a really balanced offer online. Just having this focus on women's is really helping us to find areas of opportunity that we haven't previously seen in order to find that growth.

Thanks, Brooke. There aren't any other questions for Rip Curl at the moment. So I might just hand it across to Amy at Oboz. One question, what gives you the confidence that you can achieve the aspiration for the medium-term growth in sales that you've set out today? I think you're on mute, Amy.

Thank you. Sorry about that. The confidence in the demand that we're seeing in our forward order book as well as the opportunities for us to grow within our current distribution gives us the strong confidence and the fact that we absolutely have not realized any of our D2C potential due to our current supply gives us strong, strong confidence that our aspirations are very achievable based on what we're seeing with, like I said, our forward order book and our D2C channel expansion.

Thanks, Amy. I'm just conscious of time, and I want to allow a bit of time for the Kathmandu questions because there are a few. So there's no others on Oboz and Brooke, someone -- Cindy Yin from Forsyth Barr just snuck in a question just then on Chris mentioning that wetsuit manufacturing was at capacity. What are the plans to expand that capacity?

The plans are underway. We are expanding. We hired a considerable number of new employees in our owned factory on [indiscernible] in Thailand. And yes, we're ramping that up as we sit here today. So that is in full works, and we should be hitting that new capacity level in March, April next year.

Great. Thanks, Brooke. So I think we might use the last 15, 17 minutes or so to just focus on Kathmandu and Michael, maybe first question to you. This question comes from Andrew Steele at Jarden. In the Kathmandu brand, you've been talking of -- you, being the business, have been talking about growth outside of Australia and New Zealand for a number of years now. What's going to be different going forward? And what gives you confidence in the success of Kathmandu globally? I think you're on mute, too, Michael, sorry.

Sorry. What I was going to say, Ron, is in terms of the Kathmandu brand, I certainly think it's well positioned for international expansion given the strength that it has in this market share. The market share has been able to achieve in the Australian and New Zealand market compared to all of the other key competitors is quite remarkable. So it's well known around the world because of its strong dominant market share in Australia and New Zealand. As far as past efforts to expand overseas, certainly myself and many of the other team on this core weren't involved in those past attempts. From what I understand that we're very focused on particular geographies, particular countries and very much a retail-driven approach. The approach that we are taking as we move forward is really a wholesale and online approach to start with. We think we've got the in-house capability not only within the Kathmandu team, but within the other group and other branded roles that we have across the organization, which sets us up for a much greater success. And I say that because with the Rip Curl acquisition, what the group now has is a presence in a lot of these markets. So we don't need to go about and identifying warehouse space and people to collect money or to make pay for our employees. We have all that. We have that presence already. Importantly, what we also have is authenticity in each of those markets, not only with the Kathmandu brand but with the other brands that we operate with. So in the U.S.A., North America, we have obviously Rip Curl and Oboz with an existing presence. And obviously, in Europe, we have Rip Curl. And if we look at the Rip Curl theme, the fact that Rip Curl is a 50-year-old brand who has been selling in those markets for some 20, 25 years, the fact that Kathmandu has purchased Rip Curl gives an automatic authenticity, particularly to the wholesale account base with which we work that the company has never had before. So certainly, with the new team that we've got onboard, the new internal experience across all of our brands, the existing infrastructure and that authenticity that we automatically bring to the table in terms of wholesale, given that there is -- while the end consumer for the different brands is not necessarily the same, a lot of the distribution, particularly in wholesale is. So that's some of the reasons that gives me full confidence that as we move forward, the Kathmandu expansion will certainly be successful.

Thanks, Michael. And Reuben, maybe I'll direct a few questions now to you. And if needed, you can then direct them to Eva or Robert. But we've got a few questions now from Cindy Yin at Forsyth Barr. In terms of Kathmandu's plans to establish itself in offshore markets against the large existing brands, do you see more competitive pricing compared to the premiums commanded in Australia and New Zealand?

I think if I understand the question correctly, more competitive pricing versus other brands? Is that what the question is?

Yes. So is there going to be more competitive pricing in the offshore markets relative to what you're seeing in the Australian and New Zealand markets generally?

Yes. I mean, yes, they are completely different markets with different competitive forces at play. So we will be pricing our product to be competitive in those markets, not necessarily tagged to what we have in New Zealand and Australia. New Zealand and Australia is a little bit unique in that we have a lot of direct-to-consumer brands like our sales, for example, [indiscernible], the global brands tend to come in at a premium because of -- because they go through distributors. So they end up being priced at a higher level here than what they are in other markets. And Robert may want to pitch in and talk about his experience as well. But take The North Face, for example, it's quite a premium in this market, but not so much in North America. So we actually -- when we hear ourselves and where we pitch ourselves, we're actually quite competitive in terms of price points as well.

Can I add to your reply, Reuben, a little bit? We just got through setting retail prices for the rest of the world over the past couple of weeks as we go to market to engage with the wholesale community for autumn/winter '22 because it is the selling season for prebooking right now. And we sort of benchmarked and took a deep dive into the key competitors across all the global markets when setting our retail prices to ensure that, one, we got the gross margin that we desired, but also that we were competitive across every single key category in the marketplace to ensure that we didn't go out of the blocks with the wrong pricing, which I think actually we did when we engaged with global markets historically. We didn't quite have our price buckets set. And so we weren't as competitive as we could have been. And so this time around, we've spent the past 8 weeks, ensuring that our price structure is absolutely market competitive in the rest of the world.

And maybe just turning to brand. What -- I missed this. A couple of people have asked a similar question Bianca Fledderus from UBS and Cindy Yin the from Forsyth Barr. In terms of brand recognition in the new offshore markets in Europe and Canada, how do you intend to increase brand recognition? And what will be the impact on marketing costs over the next few years?

Sure. I'll start and then I'll pass over to Eva. But certainly, we will have to invest in some marketing as we enter these markets. Typically, a wholesale brand would look to be around 10% of sales as we're establishing ourselves, if not more, initially. So there will be an increase in marketing costs as we enter and grow those markets. But I'll let Eva speak to how we grow our winters.

Bianca and Cindy, thank you for your question. So absolutely, what we need to do in those markets is focus around building awareness. And as you're, no doubt, aware, that's often the most expensive part of the funnel but we feel confident, as Reuben mentioned that, firstly, there will be an investment that's required, and that's exactly what we're looking at. But we also believe that through our positioning is that we can look to run events with local influencers, local celebrities, driving PR. So whether that's pop-up stores or interesting, innovative sort of out-there ways to start to gain attention, which will also enable us to bring in wholesale retailers into the fold and get them engaged about the brand. So we have a big job to do globally, but we're very excited about the opportunity.

Thanks for that. Just maybe 1 for you, Reuben. This is from Cindy Yin at Forsyth Barr. Kathmandu's revenue growth ambitions to NZD 600 million over the next 3 to 5 years translates to an ambitious CAGR. Is most of this driven by the rebrand/brand positioning?

As I outlined in my slide on that, we see $120 million comes back from getting back to pre-COVID levels as travel -- international travel resumes. We used to do a lot of business, particularly in the first half equipping customers hit into the Northern Hemisphere to a cold climate from a warm climate, particularly in Australia. And so we see that as that international travel comes back, we see that business coming back to us. But then on top of that, we are growing our offer in our all-year-round relevance. So this season, for example, we've launched Sun-Stopper. We've launched wind chaser jackets. These are out of the blocks, styles that are adding incremental business to our current summer offer. And we will do more of this as we go through the next few years to really build out that year-round relevance. So that's really the key thing. But obviously, it's all supported by the brand relaunch and the approach to marketing that we're taking. So anything kind of works together to really support those ambitions. And then the global ambition of $100 million over 5 years yes, relatively ambitious, but we absolutely believe it's possible. And so that adds on top of the Australia and New Zealand business that we have already had.

Thanks, Reuben. A question from [ Richard Chart ] from [ Kinetic ]. -- Within Kathmandu, are you looking to reduce your dependence on high-low and 3 key sales periods a year? If so, how will you achieve this?

The high-low emotion has been with us -- part of our DNA for a long time. So any reduction in reliance on that has to be managed very carefully. So we are looking to not just be reliant on selling on price and promotions. So as I mentioned, historically, we have focused pretty much all of our marketing efforts on those promotional periods, which does just drive a consumer perception that we're always on sale. And so over time, we are looking to step by step, reduce that perception and reduce that reliance on price. As the brand positioning improves and the marketing has stepped up, our online offer stepped up and the product improves that will become a natural evolution that we can not -- we don't have to rely on price, but we can sell on much more desirable products upfront at more full price.

Just maybe keeping on the topic of desirable products, Marni Lysaght from the Macquarie Capital, I mean this -- the question is on desirable products. Can we please have some more detail on Kathmandu's Canadian and European launch? Is there specific interest in given products and colors? And will you need to manage fashion or product risk to a greater extent?

Robert, do you want to get on that?

Sure thing. We've just launched the autumn/winter wholesale activity, just -- we're only a week in. So we don't have a lot of data yet back from the markets. I can't wait actually until we start to hear back. But we did do some soft launch activity heading into those markets with spring/summer. And quite honestly, the new styles, the new aesthetic in the line is that which is most resonating with those wholesale customers in the Northern Hemisphere out of the blocks. I anticipate the same for autumn/winter '22. But as we look to differentiate in those markets and retailers in those markets look to differentiate their offering to their customer, they're looking for brands that stand out that have breakthrough coloration, breakthrough styling and details, features and sort of product execution that's different than the next brand over on the rack. And so they're actually responding most positively to our most sort of assertive style direction changes. And that should be expected, right, in a crowded international market where a lot of the competition tends to look similar to one another. You don't really stand a chance unless you look different and sort of appear different and show it differently with different stories and sort of a different take on the consumer. And that's exactly what those retailers want. They need to reach the same consumers that we're trying to reach here at home, urban, cosmopolitan millennials who have the world at their fingertips and have infinite choice in their shopping and their behaviors and are extremely sophisticated. Everybody in the world, every shopper in the world these days is an aesthete and is an aesthetic sophisticate. Everybody's got their own brand. And so we have to show up and be relevant to those customers if we're going to stand and compete internationally. And so, so far, the word back is all around that newness and a little bit less around the annuity styles that we have in our line here that sort of keep the lights on. They're really important in our local market. They may not be as important in our global market, and we'll just have to navigate through that. I think it's possible. I think we can, like I said earlier, have our cake and eat it too.

Thanks, Robert. A question from Mark Wade at CLSA. What challenges do you envisage as you grow Kathmandu international sales to $100 million? And relatedly, could you expand on cross-sell opportunities for the Kathmandu brand within the Rip Curl network?

I think the challenge is always -- I mean, we're going to be a challenger brand in what is a very competitive market. So really getting that cut through is a challenge in itself. But we believe that we are firmly positioned very well. We've got a clear brand positioning but a great product offer, and we've got a great team on the ground in those markets to help us achieve that. But it's not like we don't just show up and new brand is going to list us. So there's always going to be challenges along the way to really entice those retailers to take a risk on a new brand. In terms of cross-sell opportunities, we have explored the sides and discussions. I mean, there's 2 aspects to that. One is potentially we can trial, shop-in-shops within some of the Rip Curl stores in Europe. For example, I've got a store in Germany, which would be a great place for Kathmandu to have a presence. And then in other areas, I think we want to keep the brands separate as much as possible in terms of speaking to the right consumer. There are some multi-branded retail opportunities potentially in [ Brookville ] so it's most of the chain that we could -- we are exploring. But we don't want to necessarily dilute the brand offer for the consumers. I don't know, Brooke, do you want to jump in on that as well?

Yes, and I completely align there. Where we do have great potential is just unlocking what we know about our customers. We've got shared synergies in these platforms that where -- you heard Eva talk about earlier that we're implementing. And so when the time is right, I think we'll use that as an opportunity to better understand our consumer and how to create better products and to personalize our communications to them in the right way. Certainly looking at the data for surfers, 43% of surfers are likely to go hiking or bushwalking. So there's just some natural symmetry there that, in time, we'll be able to tap into.

Thanks for that, Reuben and Brooke. We're going to close shortly. So maybe just a couple of final questions. I know there's a whole lot more that still need to be answered. A couple of questions from [ Page Hennessy ] at the Accident Compensation Commission. Following the Kathmandu brand relaunch in May, do you have any data to show the customer demographic has started to shift towards the younger age group? And also, how are you thinking about market share in Australia and New Zealand? How has your market share gone? And what's your confidence on regaining any lost market share that might have happened once stores reopen?

I'll let Eva talk to the customer demographic. But -- so in terms of market share, we are really confident that we're going to have a good return to retail traders as stores open. We're seeing that already in Sydney and Melbourne and looking forward to getting our Auckland stores open tomorrow. So I think -- and it's coming into -- obviously come into a summer where people are unlikely to be vacationing and holidaying at home. So the demand for summer products like camp equipment and tents is strong and also demand for some of the new ranges that we've introduced this summer like Sun-Stopper, as I mentioned, has also been very strong. So we're confident that we will be well placed to take advantage of the return to retail and as we are ready. In terms of the data on age demographic, I'll let Eva take that one.

Thank you, [ Page ]. Yes, absolutely. So we measure a few ways. So we work with Kantar, which is a world's leading research agency. So we work with Kantar on our overall brand health tracking measures. We also do pre and post campaign analysis as well. And what we can see is the relaunch. And we're measuring in 2 ways. Firstly, we're measuring on our core audience, 25 to 34. And we're measuring total market as well for 18 to 54 because we want to see what shifts we're making across total, also our core that we want to grow with. And what we can clearly see from that is that we have driven brand affinity and consideration with that 25- to 34-year-old audience. And also, we've driven all of our key brand attributes as well. So certainly, what we could see historically is that they didn't -- we weren't so much in their consideration set, but we certainly are now they are paying attention and the shifts that we're making, the transformation that we're making not only in brand, but importantly, in product is starting to resonate with this consumer, which is really exciting.

Thanks, Reuben. Thanks, Eva. We're now well in truly over time. I know we could keep going for at least another 1.5 hours, if not longer given all the questions that are still needing to be asked. But I'm just conscious we've all got diaries and days ahead. So I might just hand back to Michael Daly just to wrap up and close out at the Investor Day. Thanks, Michael.

Yes. Thanks, Ron. Thanks to everyone for participating today. Hopefully, what you got out of it was that you got to meet a broader depth of executive across the group. Hopefully, you can see that all of the brands are in really strong hands, and we're really well placed to realize the potential of all the brands in the future. And hopefully, through the deep dive in Kathmandu, any concerns anyone has had on recent trades have been, I guess, overcome. If anyone has any follow-up queries or questions, please direct them through to [ Ron ] at [indiscernible] and we can see how we can accommodate that. But other than that, thank you very much for your time. And hopefully, next time we can do it in person. Cheers. Thank you.