Dr Martens has reported a jump in profits and raised its guidance for revenue growth next year as the iconic boots brand shrugs off inflation and the effects of the pandemic.
The company, which listed in London last year, said it sold more boots than ever in 2021 and expects revenue to grow in the “high teens” in the next financial year. Sales grew 18 per cent to £908.3mn in the year to the end of March, while pre-tax profit nearly quadrupled to £214.3mn.
Shares in the company jumped 25.5 per cent in early morning trading on Tuesday to 271.6p. The company floated at 370p a share.
Taking back control over sales, by ending contracts with distributors that supply Dr Martens to wholesalers, has been one of chief executive Kenny Wilson’s main objectives when he set out four years ago to rejuvenate the brand once revered by punks and skinheads.
He credited the move for the sales rise. “It was really powered by direct-to-consumer — our own stores and websites,” he said, adding that selling directly to consumers boosted margins and that the branded stores serve as marketing, driving online spending.
“When we open a retail store in a specific city, it drives performance on the website,” he said, citing examples of store openings in Texas having boosted local shopping on its website by up to 80 per cent.
Dr Martens said it plans to open between 25 and 35 new stores in the next year, mainly in the US and Europe including Italy and Germany. In Japan, the company has begun a push to end franchise contracts and take back ownership of Dr Martens-branded stores.
Wilson said consumers in Germany and the US had in the past year been buying more Dr Martens products per head, a trend that he was confident would be repeated in other countries. “That’s why we’re feeling confident . . . there’s vast untapped potential of the business,” he said.
Analysts at Investec said Dr Martens’ past financial year had been “executed beautifully” and was a testament to the “power of its proven . . . strategy”.
Inflation pushed the retailer’s cost base up by 6 per cent in the past year, but the company said this would be offset by price increases planned from July.
Wilson remained confident of the brand’s future growth. “Our brand positioning has always been about rebellious self-expression, being an individual — and everyone wants to be an individual,” he said.
Private equity group Permira, which in 2013 bought a struggling Dr Martens for £300mn, made more than a tenfold return on its investment when Dr Martens last year hit a £3.7bn valuation at its initial public offering.
Source: Financial Times