Profits down, sales up for boot maker Dr Martens
Tinashe Mandirahwe, former owner of Cathula Sandals in Harare, Zimbabwe, was part of the brain drain from that country, and now describes himself as a 'Canadian Businessman and Retail Analyst'. He retains an interest in footwear, and sends S&V an occasional article on some aspect of the footwear business. Here he writes about Doc Martens' results.
With Christmas approaching, UK-based footwear brand Dr Martens has announced that its profits for the 6 months to September 2022 were lower than expected. This announcement sent holders of Dr Martens shares into a not-so-comfortable position as their shares went down some 20% as of November 22, 2022. Increases in leather prices amongst other operating costs contributed to the 5% decrease in profits for this period.
Dr Martens, also known as Doc Martens, Docs or DMs, uses oil-based soles so the rising oil price has had a negative effect on the company's bottom line. The weakness of the pound has also put pressure on its margins. Other factors that contributed to the decline in profits included investment in marketing and new store openings.
There were also supply chain disruptions caused by a worker strike at UK's busiest container port - Port of Felixstowe.
Interestingly, despite the drop in profits, the company saw a 13% rise in sales to £419 million.
Moving forward, the company says it will continue to put money into the business. It plans to increase prices of its top seller; the 1460 classic boot, by 6% (it currently sells for about £159).
Dr Martens shoes remain popular, especially in the UK. In its 2021 annual report, the company stated that Dr. Martens sold 31 pairs per 1,000 population in the UK. In China they sold less than one pair per 1,000 population. Dr Martens sees this as an opportunity to make inroads into China and other markets for growth.
The report also states that consumers who own a pair of Dr. Martens wear them at least once a week, making them a practical everyday shoe.
Headquartered in Wellingborough district of Northamptonshire, Dr. Martens was founded in 1947 in Seeshaupt, Germany. Today only about 1% of Dr Martens are made in the UK, the rest are made in Asia.
