Kathmandu Holdings (ASX/NZX: KMD) has announced an immediate review of its head office structure.

The company will closely review costs and structures in recognition of a significant reduction in profitability in financial year 2015 compared to financial year 2014 and previous years.

Kathmandu expects the review may result in a reduction of up to ten per cent of employees in its Australian and New Zealand head offices.

Kathmandu’s CEO, Xavier Simonet, said the company was taking decisive action to address the recent underperformance in sales and profit and was looking at all areas of the business.

“I am confident the outcome of the review will enable us to continue to invest in our growth strategies and deliver improved results for our shareholders,” he said.

The company has already identified a number of key areas to improve performance, including: increased efficiencies with cost reductions in all areas of the business; increased focus on innovative and distinctive products; optimisation of existing store network; activation of Summit Club members; improved digital and social media communication and omnichannel trading functionality; leveraging capabilities of new systems and infrastructure; and identification of international opportunities through a capital-light model and leveraging of the online platform.

Simonet said by focusing on these areas the future potential of the Kathmandu brand could be realised.

The review will be completed by the end of September.