Super Retail Group Buys Macpac To Compete With Kathmandu

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By Published On: February 20, 20180 Comments

Super Retail Group has purchased outdoor gear brand Macpac which it will merge with its Rays business to create an adventure retail powerhouse to compete with market leader Kathmandu.

Over the last five months Super Retail Group (SRG) has been assessing the opportunity to acquire New Zealand based Macpac Holdings and overnight entered into an agreement to acquire the business for AU $135 million.

Super Retail Group, which also owns Rebel, BCF and Supercheap Auto, says it plans to consolidate the Rays and Macpac businesses under the Macpac brand. This will involve integrating 54 Macpac stores across Australia and New Zealand, with the Group’s CEO Peter Birtles saying there is significant opportunity to grow the business in the near future through growing its digital and commercial channels.

SRG, which suffered a three percent fall in first-half profit to $72.2 million, says its acquisition of Macpac Holdings will be funded from its existing debt facilities with the deal expected to be completed by 31st March.

Birtles says that the acquisition of Macpac and the acceleration of the adventure outdoors retailing strategy is consistent with the Group’s strategy of “providing solutions and engaging experiences that inspire its customers to enjoy their leisure time”.

“The Macpac business has performed extremely well over recent years, yet there remains a significant opportunity to grow the business in the near future through opening new stores and growing its digital and commercial channels. The heritage of the business and the quality of its products are assets that have not yet been fully leveraged, and we believe there is an opportunity to develop an experience for customers that brings these assets to the fore.”

SRG says the integration of the business with Rays provides an opportunity to position Macpac as the leading outdoor adventure specialist across Australia and New Zealand and provide a broader range of products, information and services to consumers.

“Super Retail Group will be able to leverage its capabilities in supply chain, marketing, procurement and retail operations to add value to Macpac, while Macpac’s capabilities in design and apparel sourcing will add value to BCF and Rebel,”  says Birtles.

The combined Rays and Macpac business will include:

  • Digital channel offering the complete range, extensive information and access to services;
  • Small format stores focusing on apparel with limited footwear, equipment and accessories. It is intended that goods sold will predominantly be Macpac branded;
  • Large format stores retailing an extensive range of apparel, footwear, equipment and accessories under the Macpac brand and major global brands providing a complete solution for the adventure outdoors customer; and
  • Commercial channel.

The Group expects to incur transaction costs of around AU $4 million to complete the acquisition.

Macpac, which was founded in 1973 selling hiking packs in Christchurch, today operates as a vertically integrated retailer operating 54 stores. The company is expected to generate sales of circa NZ $95 million in the fiscal year to 31st March 2018.

Kathmandu runs a network of 164 stores across Australia and New Zealand as well as its online retail business.  In FY17 Kathmandu reported a profit rise of 13.5 percent and strong sales of $406 million which it attributes to innovative products and inspiring digital content; E-commerce represented 7.5 percent of total sales.

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