Shine comes off Dr Martens as e-commerce sales growth slows

Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown

’’Dr Martens has had a city style makeover making a successful entrance into the FTSE 250 this year, but some of the shine has come off the iconic bootmaker, with e-commerce sales growth sharply slowing in the first quarter. The performance has disappointed investors with shares down by around 3% in early trading.

With so many competitors stores closed, its online operation stomped ahead during the pandemic, and although a slower pace of sales was expected as more normal retail operations resume, there are worries the company will be hit by further shipping delays which could disrupt operations.

Overall revenue still rose by 31% compared to pre-pandemic levels, and 52% compared to last year, but there was a marked deceleration in e-commerce growth. It rose by 11% over the quarter compared to the triple digit rise this time last year. Investors are also waking up to the extent of fickle fashion tastes, with the end of the summer season seeing a drop off in sales, and pick up expected in the Autumn.

The risk of the brand is that it’s a one trick pony. The company was made famous for dressing subversive types and although the chunky look may be in style for boots, shoes and sandals right now, it could fall out of fashion as tastes change. The wholesale market however remains resilient, with sales particularly strong in the US. Widening its footprint of styles is likely to be the path trodden in the future, but that also risks diluting the brand’s core image.’’

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