Kathmandu founder Jan Cameron says chain is “incredibly vulnerable”

Jan Cameron the founder of the Kathmandu clothing chain who sold the business two years ago has stepped up her attack on the group ahead of its sharemarket float, claiming it is “incredibly vulnerable” to competition. Cameron, who earlier this week announced plans to launch her own outdoor wear chain to compete with Kathmandu, has also lashed the company’s private equity owners, saying that she does not like the private equity model as it is too focused on short-term results.

In an interview with the Australian Financial Review, Cameron has revealed more about her plans to take on Kathmandu. She plans to open the first stores by the end of next year (despite the fact her non-compete agreement with Kathmandu expires in May 2011) and would eventually like to expand to 30 stores in Australia and New Zealand.

According to the report, Cameron will spend around $30 million on the venture, which will be focused on providing competitively priced outdoor wear clothing. Cameron says Kathmandu’s high prices are no longer realistic.

“Kathmandu are incredibly vulnerable with their sales model in terms of anyone else coming into the same space with lower prices,” Cameron told the paper.

“Kathmandu does a down jacket priced at $400 to $420. It’s discounted during their annual sales but the point is I could see being able to retail that same jacket at $179, day in, day out.”

The new comments will not be helpful for Kathmandu’s management, who are currently spruking the company’s upcoming float to potential investors.

The float is expected to raise around $375 million, although investors will be watching closely for the market’s reaction to the Myer float on 2 November for a guide on the market’s feelings about the retail sector.