London (AFP) – British iconic bootmaker Dr Martens on Thursday announced another sharp drop in annual profits, as it looks to build on recent stability under its new chief executive. Net profit stood at £4.5 million ($6.1 million) in the year to the end of March, down from £69.2 million in 2023/4. Revenue dropped more than 10 percent to £787.6 million, it added in an earnings statement.
Despite the results, its share price surged by a quarter Thursday as investors welcomed recovery in the United States and sizeable savings. Recently-appointed chief executive Ije Nwokorie said in the earnings statement that Dr Martens had made annualised cost savings of £25 million. “Our single focus…(over the last year) was to bring stability back to Dr Martens,” Nwokorie said. “We have achieved this by returning our direct-to-consumer channel in the Americas back to growth, resetting our marketing approach to focus relentlessly on our products, delivering cost savings, and significantly strengthening our balance sheet.”
Nwokorie became CEO in January, stepping up from his role as chief brand officer at Dr Martens. He was previously a senior director at Apple Retail. While highlighting risks from “macroeconomic uncertainty,” Dr Martens said it was well placed to manage any fallout caused by US President Donald Trump’s tariffs. “While the USA is an important market for us, we are a truly global brand that is sold in more than 60 countries around the world,” it added.
Neil Wilson, UK investor strategist at Saxo Markets, noted that while momentum at the group “is good and discounting is being reduced, (there is) still a long way to go.” He added that the brand could become a takeover target as it recovers further. “A potential bidder would have a strong, recognisable brand name to add to a portfolio and could benefit from vertical integration of the supply chain into a bigger parent,” he added.
Dr Martens began life 65 years ago as a tiny German company making orthopaedic boots, before becoming the go-to brand for punks, skinheads and goths. Online demand boomed during the coronavirus pandemic but skidded on weakening US demand as the economy emerged from lockdown.
© 2024 AFP
