Rip Curl was founded in Torquay, Victoria, in 1969, and spent fifty years in private hands. This morning its parent company told the Australian stock exchange it's in exclusive talks to be bought by a firm that owns no factories at all. Just the logos. That's the whole business. Welcome to Fashion Business Daily. It's Monday, November 2, and we have three stories today. KMD Brands, which owns Rip Curl and Kathmandu, grants Bluestar Alliance exclusivity on a possible takeover. The Times reports that Modella Capital, a buyer of high-street chains, is weighing a bid for the London label Joseph. And Musinsa Standard, the fast-growing Korean basics brand, hires a designer with a Lemaire and Louis Vuitton background as creative director.
Elias Visontay, writing in The Sydney Morning Herald:
In an announcement to the ASX on Monday, KMD Brands said that after receiving a number of approaches from external parties, it had entered into an exclusivity agreement with retail powerhouse Bluestar Alliance “regarding a possible transaction to acquire all of the shares in KMD”.
Let's be exact about what this is. It's exclusivity and due diligence, not an offer. KMD says there is no certainty the process produces a binding proposal, and its board says granting exclusivity is not a recommendation of any deal, so shareholders don't need to do anything yet. The Post in New Zealand reports the exclusivity can be extended if conditions are met, up to a long stop date of December 23, a Wednesday. The market liked it anyway. KMD shares closed up 10.37 percent on the ASX at 1 dollar 65, according to the Herald. That's from a low base. The stock has fallen almost 60 percent in the past year. The Post says KMD reported a net loss of 414.4 million dollars in its 2026 financial year, mostly a 394 million write-down on the value of its brands, especially Rip Curl and Kathmandu. That was its third straight annual loss. Underneath, sales rose 6.5 percent to 1.05 billion, with Kathmandu up 11.1 percent and Rip Curl up 3.8. So the brands are selling, but the company that owns them is worth less on paper than it paid. That gap is exactly what a brand manager looks for. And think about who Bluestar is. It bought Off-White from LVMH. It bought Dickies from VF, which we talked about last week in VF's results. It owns Hurley, which it got from Nike, plus Scotch and Soda and bebe. It collects names. And it's a specific model. The Post describes Bluestar as buying the intellectual property of well-known or struggling brands and licensing the rights out to manufacturers, distributors and retailers. It says the portfolio generates more than 13 billion US dollars in global retail sales through more than 600 licensees. KMD, by contrast, runs more than 300 of its own stores, mostly in New Zealand and Australia. That's what I'd worry about. Kathmandu and Rip Curl are operating businesses, with shops, staff and a surf team. Licensing works when the brand is the asset. It goes badly when the product gets farmed out to whoever pays the royalty, and three seasons later the wetsuits are worse. How the stores would be handled under Bluestar isn't addressed in any of today's reporting, so that's open. On the seller's side, Jun Bei Liu of Ten Cap told the Herald that Kathmandu is too seasonal, and that it would only make money in one month of the year, around June's winter sales. She also points to fast-fashion competition. The precedent everyone in Australia will reach for is Billabong and Quiksilver, which Authentic Brands acquired in 2023. The next marker is whether Bluestar turns due diligence into a binding proposal before that December deadline.
Sandra Halliday, writing for FashionNetwork:
Modella's interest in Joseph is perhaps a surprise given that its investments are usually in retailers operating at the lower end of the price scale.
Some sourcing first. This comes from The Times, which Retail Week identifies as the Sunday Times, so it would have run on Sunday, November 1. It's reported interest, not a bid. Modella, Joseph and PwC all declined to comment. Retail Week says Modella has joined a group of bidders. According to The Times, Joseph brought in PwC earlier this year to explore a sale, one round of bidding has reportedly happened, and the next stage is due this month. Remind people what Joseph actually is, because some of our listeners are too young for the nineties. Joseph Ettedgui founded it in 1966. Japan's Onward Kashiyama has owned it since 2005, when it paid 140 million pounds. It still runs several UK stores and concessions and sells through multi-brand stores around the world. Turnover fell last year to 45 million pounds from 56 million. It's still losing money, but losses narrowed to 3.4 million pounds from 12 million, and The Times says it is not thought to be in financial distress. And it's been getting its edge back. Mario Arena came in as creative director almost two years ago, from Christopher Kane and JW Anderson, and Joseph went back to London Fashion Week last year. That's a brand rebuilding the product before it rebuilds the numbers. Which is why handing it to the people who run TG Jones makes me nervous. Modella's record is what the trade will judge it on. It owns TG Jones, Hobbycraft and Flying Tiger Copenhagen. FashionNetwork says its purchases of The Original Factory Shop and Claire's didn't work out, that TG Jones has been problematic, and that it reportedly left the Poundland sale process. Halliday's point is that a premium-to-luxury fashion label would sit well outside its usual price range. Running discount stores and running a designer brand are completely different skills. You can squeeze costs out of a card shop. Squeeze a tailoring label like that and the cut gets worse, and the customer notices straight away. For Onward, what matters is what a 45-million-pound business with narrowing losses fetches, set against the 140 million it paid twenty-one years ago. Until a buyer signs, Modella is one name among several bidders, as reported by one paper.
Kang Myeong-yeon, reporting for Financial News in Seoul:
Musinsa plans to strengthen Musinsa Standard's global identity with Kim as CD. Having established mass appeal with reasonable prices, the brand now aims to build a distinctive image by adding Kim's original perspective.
This one is confirmed by the company. Musinsa announced on Monday that Kim Ji-yong, founder of the label JiyongKim, joined Musinsa Standard on Friday, October 30, as creative director. He'll run creative strategy for Musinsa Standard Men, covering product, visual identity, seasonal design direction and campaigns. This one I like. Kim's the real thing. He studied at Bunka and Central Saint Martins and worked at Lemaire and Louis Vuitton, then launched his own label in 2021. He made the semifinals of the LVMH Prize, won the Samsung Fashion and Design Fund two years running, and showed at Pitti Uomo in June. PAP Magazine says he's known for a sun-bleaching technique. That's a hands-on fabric person, not a mood-board hire. And the business he's joining is moving fast, by the company's account. Musinsa Standard launched in 2017, and last year it made the top five Korean brands in the SPA category, the design-make-and-sell model of Uniqlo and Zara. It's aiming for 1 trillion won in sales this year, more than double last year's 470 billion. That's a target, not a result. It has more than 50 stores in Korea, it's expanding in China, and the Philippines, Indonesia, Vietnam and Malaysia come next year. Put this next to Zara hiring a design director for John Galliano, which we covered Friday. Mass brands are borrowing designer credibility. The difference is that Kim is in the creative director's chair. News1, in Korean coverage carried by Financial News, notes it's rare for a major Korean SPA brand to bring in a well-known outside creative director. The previous creative director, Lee Geon-ho, had held the job since launch and is credited with building the base. So this is a change in how the brand is run as well as who designs it. My only worry is the volume. A label like JiyongKim makes small runs. Musinsa Standard sells basics by the million. If his ideas survive at that price, it's a coup. If they get diluted to nothing, it's a name on a press release. His first seasonal collections will tell us. The number to watch is that trillion-won target and how much of it comes from outside Korea.
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Prediction: Bluestar gets its binding proposal in before Christmas, and Kathmandu ends up licensed somewhere it's never had a store. December 23 will tell us. Fashion Business Daily is produced by Lantern Podcasts, and we're back tomorrow, Tuesday, November 3.