Struggling boot brand Dr Martens to cut costs, invest in marketing

Dr Martens’ laid out plans for cost-cutting measures on Thursday (May 30), as the struggling British bootmaker faces mounting pressure to bolster its finances amid dwindling demand in the United States, its biggest market.

Inflation and economic uncertainty has hurt consumers’ appetite for more expensive items like the brand’s US$170 classic leather lace-up boots.

“There’s something going on with the USA consumer that they haven’t been spending, obviously there’s a big election there this year, so there is clearly still uncertainty,” CEO Kenny Wilson told Reuters in an interview, adding that he expects an improvement in the US business in the second half of the year.

In leadership changes announced by Dr Martens in April after sales dropped, Wilson will step down as CEO at the end of this financial year, to be replaced by the current chief brand officer Ije Nwokorie. Giles Wilson, who took over as chief financial officer this month, said Dr Martens aims for cost savings of US$25.38 million-US$31.72 million and would see the benefits of the plan from fiscal 2026.

The cost cut announcement came after investment firm Marathon Partners Equity Management urged Dr Martens to detail planned expense cuts and buy back stock.

Dr Martens shares were up more than 4 per cent by 0845 GMT.

Weak wholesale demand in the US drove profit before tax down 42.9 per cent to £97.2 million (S$166.9 million) for the year to March 31, just above an average analysts’ estimate of £96.4 million.

Wholesale accounts for around 60 per cent of Dr Martens’ revenues in the US, with 40 per cent coming from its own stores and website.

Overall Dr Martens stuck to its forecast for group revenue to dip by 20 per cent in the first half of this year, with wholesale revenues falling by a third.

Dr Martens will increase its marketing spending in the US to boost demand ahead of the key autumn-winter season, outgoing CEO Wilson said. REUTERS