KMD Brands recorded a 12.6% growth in revenue over the last 12 months.
👉 Background: KMD Brands owns some of the seriously iconic Australian brands like Kathmandu and Rip Curl... as well the lesser known US boots brand Oboz.
👉 What happened: Despite the shaky economy, KMD Brands recorded a 12.6% growth in revenue over the last 12 months. And this led them to hit $1 billion AUD of revenue for the very first time. Now KMD reckons it's got a new secret sauce for the Kathmandu brand specifically.
👉 What else: They've slowly been shifting away from a "high-low" pricing strategy. And as a result, Kathmandu's margins improved from 4.7% to 7.9%.
💡A high-low pricing strategy is when you set prices higher than your competitors but promote frequent sales and discounts.
💡This discount strategy can drive a significant amount of volume when you're on discount, but can also eat into your profit margins if its not managed well. The biggest problem? It can become quite addictive for retailers who constantly want that 'sugar hit'.
💡While Kathmandu's new, consistent pricing strategy will lead to more stable profit margins... it definitely won't create the same sense of urgency for purchases.
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