Too many boots and not enough sales hit Dr Martens results

Robyn Duffy, senior analyst for consumer markets at RSM UK comments on today’s results from Dr Martens: 'Dr. Martens' poor FY24 results come as no surprise to investors. Inventory bottlenecks in the US and weak wholesale orders in the region were already expected to impact profits, compounded by inflationary cost pressures with the brand having little head room to raise prices.
 
'However, additional strategic headwinds could further overshadow the business' future prospects. Direct-to-consumer sales are central to Dr. Martens' strategy and saw positive growth. But the sheer volume of products available across core categories has reached unsustainable levels. The website lists 511 women's footwear items, 385 men's footwear items, and 130 products for children and accessories. This overwhelming selection risks causing decision fatigue for consumers, cannibalizing sales and could be one reason why website sales are flat. With so many options, customers are likely to adopt a 'good-better-best' approach, potentially impacting sales of higher-value, higher-margin goods.

'Meanwhile, other successful brands have thrived by refining their product ranges and focusing on net sales. Taking a step back and re-evaluating its strategy to better balance supply and demand, while streamline its product offerings, could help to revive prospects for the much-loved brand.

'The excess inventory in the US indicates that Dr. Martens has not yet aligned its supply with demand in the region. US consumer spending has been much stronger than many might have expected, meaning the business needs to focus on smarter customer engagement if it hopes to gain traction.'