By Jenny Ruth
|
Wednesday 1st June 2011 |
Text too small? |
Kathmandu's planned new distribution centre in Christchurch will provide additional capacity to cater for the retailer's growing store network and product range, say analysts at Goldman Sachs & Partners.
"This avoids the need for third party warehousing to hold inventory in peak trading periods," they say.
Kathmandu will have increased its store numbers in New Zealand from 31 in the year ended July 2009 to an estimated 40 this year and the group has a long-term target of about 49 New Zealand stores. It has also significantly expanded its product range in recent years.
The company's current 3,600 square metre distribution centre has been operating since 2000 when the company had only nine stores in New Zealand.
The new distribution centre will be 5,000 square metres and new technology, such as electronic scanning for 'picking' and 'put away'processes replacing manual systems, will improve its efficiency, the analysts say.
"This may help to improve Kathmandu's relatively low stock turnover times in the six months ended January)," they say.
The Goldman Sachs analysts have a 12-month share price target of $3.10.
"We believe a key catalyst in the near term is the outcome of the winter sale promotion." This runs from mid June to the end of July.
Recommendation: Buy.
No comments yet
Kathmandu shares rise to all-time high as analysts upgrade estimates after record annual profit
Kathmandu shares soar as retailer delivers record earnings, upbeat outlook
Kathmandu boosts 2013 profit 27 percent, expects solid performance in 2014
Kathmandu shares gain 2.2 percent as sales momentum remains through third quarter
Kathmandu's Australian stores drive sales growth in first half
Kathmandu lifts 1H profit by as much as 75 percent on Australian sales growth
Kathmandu first-quarter sales rise 19.5 percent
Kathmandu FY profit falls 11% though second-half performance improves
Kathmandu 1H profit plunges on shrinking margins
Kathmandu lifts sales 16% in 15 weeks ended mid-November
