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Following in the footsteps of fellow listed retail groups Kathmandu (ASX: KMD) will be shutting down its Australian store network from 5pm today.
Kathmandu, which also owns surf brand Rip Curl and footwear retailer Oboz, says the closures are the result of social distancing measures imposed by the Government.
As such, retail store and head office staff, with the exemption of a skeleton crew, will be stood down without pay for four weeks. Staff will be able to access leave entitlements and government assistance.
The Australian shutdowns follow the closures of Kathmandu outlets in New Zealand on 25 March. Stores in Brazil, North America and Europe are in similar situations with wholesale customers and offices closed due to government mandated closures or lockdowns.
Online retail continues to run on a business as usual basis in Australia, Europe and the USA. However, in New Zealand, online distribution has been suspended.
Kathmandu is in the process of negotiating a "fair rental outcome" with landlords to ensure rental costs align with sales performance.
Other cost saving initiatives undertaken by the company include cancelling inventory orders and slashing senior management salaries by 20 per cent until further notice.
In light of the Covid-19 situation the KMD board has suspended dividend payments until normal trading conditions can resume.
"Our total focus is to protect the health and wellbeing of our terms and customers and ensure business continuity," says Kathmandu CEO Xavier Simonet.
"I am so grateful to all our teams around the world for their resilience in this situation of uncertainty and challenges."
Updated at 9:10am AEDT on 27 March 2020.
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