Dr Martens faces significant financial challenges, reporting a pre-tax loss amidst declining revenues.
- The retailer’s revenues fell to £324.6m, marking an 18% decrease largely attributed to a slump in wholesale sales.
- All operating regions met expectations, with notable revenue declines in EMEA, Americas, and APAC markets.
- A comprehensive refinancing deal, including substantial loans and credit facilities, aims to stabilise financial operations.
- A leadership transition is underway, with Ije Nwokorie set to succeed the outgoing CEO, Kenny Wilson.
Dr Martens has entered a challenging phase, reporting a pre-tax loss of £28.7 million for the 26-week period ending 29 September, a stark contrast to the previous year’s profit of £25.8 million. This downturn is primarily due to an 18% drop in revenue, now standing at £324.6 million, significantly impacted by a 29% decrease in wholesale sales.
The company’s direct-to-consumer (DTC) division now accounts for a larger share of total revenues, rising to 56.4% compared to 49.6% last year. All regions operated within expected parameters, though performance waned with EMEA revenues down by 16%, the Americas by 22%, and the APAC region by 12%.
Contributing to the loss were exceptional charges amounting to £9.2 million, largely tied to cost-cutting strategies. These measures include a target of £25 million in savings by the fiscal year 2026, with a significant portion emerging from workforce reductions.
The company has secured a new refinancing arrangement to replace upcoming maturing facilities, introducing a £250 million term loan and a £126.5 million revolving credit facility. This is a departure from the previous £281.7 million term loan and £200 million revolving credit facility, with the new terms set for an initial three-year period, expandable for two additional years subject to lender consent.
A pivotal leadership change sees Ije Nwokorie taking over as CEO on 6 January. Kenny Wilson, the current CEO, will step down and assist with the transition until the end of March. Wilson reflected on the transition, stating, “This is a year of transition and we have made good progress with our four main objectives.” He highlighted achievements such as inventory reduction, debt refinancing, and promising new product ranges as a foundation for future success.
Dr Martens is navigating a period of financial and operational transition with strategic initiatives and leadership changes poised to steer the company forward.
