KMD BRANDS LIMITED — Capital/Financing Update 2011

May 22, 2011

23 May 2011

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NEW CHRISTCHURCH DISTRIBUTION CENTRE FOR KATHMANDU

Kathmandu Holdings Limited, the listed outdoor clothing and equipment retailer, has committed to the construction of a new national distribution centre in the Portlink Industrial Park in Christchurch.

The new centre will supply the company’s existing 37 New Zealand stores and meet the demands of the company’s future growth.

Kathmandu Chief Executive, Peter Halkett, said the increased warehouse space would support its on-going store roll-out program and the expansion of the company’s product range.

“As a major player in outdoor gear for travel and adventure in Australasia, Kathmandu currently has its support offices and national distribution centres in Christchurch and Melbourne. But with more than 100 stores across Australia and New Zealand, the company has been reviewing its future requirements,” Mr Halkett said.

The current national distribution centre has been operating since 2000 when the company only had nine stores in New Zealand, but it has now reached full capacity and some stock has had to be stored offsite.

“After examining a number of options, the Board has decided to build a new 5,000m2 facility at Woolston in Christchurch, near our head office,” Mr Halkett said.

“We did consider the option of an alternative warehousing facility in Auckland, but the Board decided that Christchurch was a superior proposition.”

Construction of the national distribution centre at the Portlink site is scheduled to begin by the end of 2011, with the facility expected to be completed in May 2012 and operational by July 2012, Kathmandu has entered into a long term lease agreement with expansion rights at the 30-hectare industrial park.

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“The decision also reflects the Kathmandu Board’s belief in the economic future of Christchurch and its commitment to the company’s heritage in Christchurch, where we have been trading for over 20 years,” Mr Halkett said.

Over the next few months Kathmandu will open three new stores in New Zealand; at Whakatane, Coastlands north of Wellington and Ashburton in the South Island, which will bring the New Zealand store total to 40.

The Portlink project is being developed by Arcus Developments Ltd.

Arcus is a specialist in the development of industrial buildings and is working in partnership with one of New Zealand’s leading construction and project management companies Arrow International Ltd.

For more information please contact:

Helen McCombie +61 2 9290 3073

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