Poor American sales puts the boot into Dr Martens

Kenny Wilson, CEO, Dr Martens

Dr Martens’ advance sales in America have taken a shoeing, and warned the company’s profits could fall by as much as two-thirds.

Chief executive Kenny Wilson said the manufacturer had “built an operating cost base in anticipation of a larger business” and will now be focused on savings.

Wilson has today confirmed his planned departure, and he will be replaced by chief brand officer Ije Nwokorie.

But he said there is confidence when they “look beyond this transition year into future years”.

Wholesale orders in America for autumn/winter are expected to be “double-digit down”, hitting pre-tax profits by £20m.

The company is also seeing inflationary pressures and increased costs to retain and incentivise staff, with a combined impact of £35m on the bottom line.

However it does not believe it can raise prices and so is planning to absorb the additional costs.

In a statement to the stock market, Dr Martens said: “There is a wide range of potential outcomes for FY25 given that we have only recently started the year.

“However, we have assumed that revenue declines by single-digit percentage year-on-year and at the PBT level we could see a worst-case scenario of PBT of around one-third of the FY24 level.”

It said the key factor was the performance in America, its largest market.

Wilson added: “The nature of USA wholesale is that when customers gain confidence in the market we will see a significant improvement in our business performance, but we are not assuming that this occurs in FY25.”

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