Dr Martens: Shoemaker broadens range of sandals and bags as profit plummets
Dr Martens has announced a new strategic focus after a bruising year which saw the brand nearly fall into the red.
It will move away from a narrow focus on boots to a much broader approach targeting shoes, sandals and bags via a strategy called “Levers for Growth”.
“Our ambition is to establish Dr. Martens as the world’s most-desired premium footwear brand,” the company said.
It hopes the new strategy will deliver a mid to high-teens EBIT margin in the medium term.
The company’s share price rose nearly 13 per cent in early trades.
Chief executive Ije Nwokorie said he wanted to “give more people more reasons to buy more of our products”.
“[The strategy] will increase our opportunities by shifting the business from a channel-first to a consumer-first mindset… we will tailor distribution to each market, blending direct-to-consumer and business-to-business, optimising brand reach and ensuring a better use of capital,” he added.
“The trouble is there is no heritage attached to these adjacent product lines,” Robinhood analyst Dan Lane said.
“The company made its name in anti-establishment boots and the more it takes its eye off that, the more damage is inflicted on the overall image.
“Burberry getting back to its roots has been warmly received, the jury’s out on whether Dr. Martens will make a success of a wider ‘product family’ or will eventually have to do the same,” he added.
Dr Martens profit plummets in 2024
The shoemaker told markets this morning that revenue fell ten per cent to £787.6m in 2024, in line with expectations.
Direct-to-consumer revenue, which accounted for 64.8 per cent of earnings, fell by 4.2 per cent, while wholesale revenue dropped by 19.5 per cent.
Adjusted earnings before interest and tax plummeted from £126.4m to £60.7m, while profit before tax fell to £8.8m from £93m last year.
However, Dr Martens said it had delivered on all four objectives set at the start of the year, with America returning to growth in the second half, as well as achieving cost savings, a stronger marketing presence, and a healthier balance sheet.
“Our single focus in FY25 was to bring stability back to Dr. Martens,” Nwokorie said.
“Looking ahead, there are significant markets for us to grow into, and we currently own just 0.7 per cent of a total relevant market of £179bn.
“This, combined with the enduring demand for our products, the robustness of our operations, the strength of our cashflow generation and balance sheet and the expertise of our people, gives me confidence that we will deliver the sustainable, profitable growth that this brand is capable of.”