Kathmandu is a retailer in Australia, New Zealand and the United Kingdom. The company sells outdoor related gear such as camping equipment, hiking gear, backpacks and outdoor apparel. Kathmandu positions its products as higher quality and prices are relative to this positioning. Recent pricing activities spell that Kathmandu may well be doomed.
From a strategy perspective, one has to be concerned for Kathmandu. Their stores (in Australia anyway) have been offering heavily discounted products for very many months now. Even their New Zealand and United Kingdom Websites show the many discount offers (their Australia Site is unreachable right now – not good for a premium retailer!!!). The problem with continuous discounting is that if people don’t now buy something on sale at Kathmandu they begin to think they are overpaying. People no longer associate Kathmandu with quality but rather discounting. This is an extremely difficult consumer mindset to reverse (refer to ‘Positioning, the Battle for your Mind’ by Ries and Trout which is the classic book about Product Positioning and Michael Porters ‘Generic Strategies’ model which illustrates the danger of having a ‘stuck in the middle’ strategy).
Kathmandu is a privately owned company so financial information is not readily available. One has to wonder whether there are hasty strategic decisions being made to improve its stock turnover ratio. The current strategy of Kathmandu requires urgent revision to avoid further damage.
P.S. There is the possibility that Kathmandu is aiming to become a discount retailer. If this is the case there are better ways of achieving this than having constant sales.