Takeover bidder Briscoe says Kathmandu is a catalogue of excuses for poor sales

A Kathmandu store in Sydney. Brendon Thorne/Getty Images

Rod Duke, the head of New Zealand retailer Briscoe, criticised Kathmandu’s sales performance after the adventure retailer rejected his $324 million takeover bid.

Duke says it’s a tough retailing market and the 2015 full year earnings for Kathmandu came in well short of analyst consensus forecasts.

“As retailers we accept that, and seek to develop and implement strategies to ensure that we outperform our competitors, and some of us have seen good results,” he said.

“But I did not expect the Kathmandu board to simply throw up a catalogue of excuses as to what it got wrong and to expect shareholders to accept it.”

The board of directors of Kathmandu called the Briscoe bid highly opportunistic and inadequate. “Briscoe can afford to offer a lot more for your shares,” Kathmandu directors told shareholders.

However, Duke says Kathmandu is a great brand and has good products but is failing to execute basic retailing fundamentals.

“As Kathmandu’s largest shareholder its latest performance gives us little confidence in its 2016 full year forecast,” he said.

Kathmandu says it expects expects significant sales growth and continued margin recovery in the current financial year with sales increasing 11% to $NZ454.6 million and earnings by 43% to $NZ48.2 million.

For the 12 months to the end of July, Kathmandu sales were up 4.2% to $NZ409.4 million. However, net profit was down 52.6% to $NZ20 million.

The New Zealand company is offering five shares for every nine Kathmandu shares plus $NZ0.20 cents for each Kathmandu share.

The Briscoe offer is open until the September 17.

Kathmandu shares are trading down more than 5% today.

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