By ANNE D’INNOCENZIO and WYATTE GRANTHAM-PHILIPS, Associated Press
8 hours ago
FILE – A Dr Martens boot inspired by Elton John’s famous Pinball Wizard outfit is displayed at a promotional event in London, March 20, 2023. Dr Martens shares plunged more than 30% on Tuesday, April 16, 2024 after the fashionable British brand predicted that wholesale revenue in the United States, its largest market, would see a double-digit decline from that seen a year ago. (AP Photo/Kin Cheung, file)
NEW YORK (AP) — Chunky boot maker Dr. Martens is warning of a tough year ahead.
The London-based company’s shoes became a symbol of youthful rebellion in the 1960s and have since remained popular with many subcultures, from punk to goth. But the company has been hampered by overexpansion and poor brand management in recent years.
Shares of Dr. Martens PLC, known as Doc Martens, plunged Tuesday after the iconic brand forecast a double-digit decline in wholesale revenue in the United States, its largest market, compared with last year.
Dr Martens also announced a management reshuffle. After six years at the helm of the company, CEO Kenny Wilson will step down. Ije Nwokorie, brand director of Dr. Martens, will take his place.
Trading in Dr. Martens shares was temporarily halted on the London Stock Exchange on Tuesday as they fell to a record low of 0.62 pounds, according to FactSet. It closed at 0.67 pounds, down more than 29%. Its U.S.-traded shares suffered a similar decline and fell 55% over the past year.
The revenue forecast could result in a considerable drop in profits, with the company highlighting an expected baseline impact of 20 million pounds ($24.9 million) on year-on-year pre-tax profit. In-season orders from wholesale customers could help ease U.S. revenue expectations, the company noted, but these are difficult to predict.
Beyond weakening revenue, Dr. Martens said he anticipated other significant expenses related to the company’s employee retention plans as well as inflation. Unlike in previous years, the company said it does not plan to raise prices to offset these costs.
Dr. Martens has a long history. The shoe’s roots date back to Munich after World War II — when Dr. Klaus Maertens, a German army doctor, developed a unique air-cushioned sole, rather than the traditional hard leather version, for help recover from a fracture. foot in 1945, according to the brand’s website.
Dr. Martens has attracted a wide range of customers and associations over the years. Beyond fashion statements in many subcultures, some controversial links include neo-Nazis allegedly signaling hateful affiliations through specific lace colors on their boots.
The brand has not been without financial difficulties either. It underwent a series of design changes amid declining sales and came close to bankruptcy in 2003. It was purchased by a private company called Permira in early 2014, and the company went public in 2021.
Neil Saunders, chief executive of research firm GlobalData, blamed Dr Martens’ woes on over-expansion at a time when the brand faces competition from sleeker comfort wear that has become more popular during the pandemic.
“They were too optimistic about expanding,” he said. “All their products are big, bulky and black. And it’s not that much in demand right now. People want much sleeker, slimmer styles in pastel shades.
Jake Bjorseth, who runs trndsttrs, an agency that helps companies reach younger consumers, agrees, noting that Gen Z consumers are embracing pastel colors and that bulky shoes just don’t fit.
In a prepared statement regarding the 2025 financial outlook, Wilson acknowledged the challenges ahead, saying Dr. Martens is focused on its plans to “revive demand for boots, particularly in the United States.”
Nonetheless, Wilson said the brand “remains strong.” Dr. Martens said it saw a recovery in direct-to-consumer sales growth during the fourth quarter.
By ANNE D’INNOCENZIO and WYATTE GRANTHAM-PHILIPS, Associated Press
8 hours ago
FILE – A Dr Martens boot inspired by Elton John’s famous Pinball Wizard outfit is displayed at a promotional event in London, March 20, 2023. Dr Martens shares plunged more than 30% on Tuesday, April 16, 2024 after the fashionable British brand predicted that wholesale revenue in the United States, its largest market, would see a double-digit decline from that seen a year ago. (AP Photo/Kin Cheung, file)
NEW YORK (AP) — Chunky boot maker Dr. Martens is warning of a tough year ahead.
The London-based company’s shoes became a symbol of youthful rebellion in the 1960s and have since remained popular with many subcultures, from punk to goth. But the company has been hampered by overexpansion and poor brand management in recent years.
Shares of Dr. Martens PLC, known as Doc Martens, plunged Tuesday after the iconic brand forecast a double-digit decline in wholesale revenue in the United States, its largest market, compared with last year.
Dr Martens also announced a management reshuffle. After six years at the helm of the company, CEO Kenny Wilson will step down. Ije Nwokorie, brand director of Dr. Martens, will take his place.
Trading in Dr. Martens shares was temporarily halted on the London Stock Exchange on Tuesday as they fell to a record low of 0.62 pounds, according to FactSet. It closed at 0.67 pounds, down more than 29%. Its U.S.-traded shares suffered a similar decline and fell 55% over the past year.
The revenue forecast could result in a considerable drop in profits, with the company highlighting an expected baseline impact of 20 million pounds ($24.9 million) on year-on-year pre-tax profit. In-season orders from wholesale customers could help ease U.S. revenue expectations, the company noted, but these are difficult to predict.
Beyond weakening revenue, Dr. Martens said he anticipated other significant expenses related to the company’s employee retention plans as well as inflation. Unlike in previous years, the company said it does not plan to raise prices to offset these costs.
Dr. Martens has a long history. The shoe’s roots date back to Munich after World War II — when Dr. Klaus Maertens, a German army doctor, developed a unique air-cushioned sole, rather than the traditional hard leather version, for help recover from a fracture. foot in 1945, according to the brand’s website.
Dr. Martens has attracted a wide range of customers and associations over the years. Beyond fashion statements in many subcultures, some controversial links include neo-Nazis allegedly signaling hateful affiliations through specific lace colors on their boots.
The brand has not been without financial difficulties either. It underwent a series of design changes amid declining sales and came close to bankruptcy in 2003. It was purchased by a private company called Permira in early 2014, and the company went public in 2021.
Neil Saunders, chief executive of research firm GlobalData, blamed Dr Martens’ woes on over-expansion at a time when the brand faces competition from sleeker comfort wear that has become more popular during the pandemic.
“They were too optimistic about expanding,” he said. “All their products are big, bulky and black. And it’s not that much in demand right now. People want much sleeker, slimmer styles in pastel shades.
Jake Bjorseth, who runs trndsttrs, an agency that helps companies reach younger consumers, agrees, noting that Gen Z consumers are embracing pastel colors and that bulky shoes just don’t fit.
In a prepared statement regarding the 2025 financial outlook, Wilson acknowledged the challenges ahead, saying Dr. Martens is focused on its plans to “revive demand for boots, particularly in the United States.”
Nonetheless, Wilson said the brand “remains strong.” Dr. Martens said it saw a recovery in direct-to-consumer sales growth during the fourth quarter.