Unlike two years ago, the relatively new online divisions of large listed retail companies are beginning to make a a meaningful impact on many balance sheets.
Kathmandu is facing increasing rents globally at its 120 outlets, which it wants to boost to 135, and profit margins are under increasing pressure.
Much of Kathmandu's almost doubling of capital expenditure this financial year, to $21.8 million, will be spent on shop renovations, IT systems and the launch of its key project, the online division.
Forsyth Barr broker Haley Van Leeuwen said many retail businesses around the country were adapting their business to encourage further online sales.
"Hallensteins have done a particularly good job at this, with the online business becoming a significant part of their strategy," she said.
Aside from Kathmandu building up its online sales strategy, it was also considering using Trade Me, Amazon and Ebay to reach new customers, she said.
"They are moving towards a multichannel approach to their business," she said.
That move would also give Kathmandu a greater global presence without the significant cost of relying on retail outlets, she said.
Kathmandu this week booked positive sales gains for the past financial year to June, but increasing margin erosion was reflected in a slump in after-tax profits, down more than 10%, from $39.1 million last year to $34.9 million.
"Kathmandu's financial results made particular focus to the online side of their business, which for them will be an important distribution channel for their products in the future," Ms Van Leeuwen said.
This has resulted in the need for Kathmandu to upgrade its present IT platform to allow for "a seamless internet retail experience" for customers, she said.
She noted Kathmandu's United Kingdom division, which comprises six outlets, was yet to break even and would not be expected to until after full-year 2013.
The new strategy for this area will be an increased focus on online sales and Kathmandu turning its physical stores into a "showroom" layout featuring high-margin apparel.
The upkeep of retail stores was another important consideration for retailers.
"The continued refurbishment of stores to ensure that brands remain fresh and relevant to customers is a common theme," Ms Van Leeuwen said.
Kathmandu was embarking on store refurbishments and moving to a slightly smaller store layout in some areas, "focusing on driving higher sales per square metre", she said.
