Dr Martens has reported a substantial drop in financial performance for the first half of the fiscal year.
- The company reported a pre-tax loss of £28.7m for the 26 weeks ending 29 September, compared to a profit of £25.8m in the previous year.
- Total revenue fell by 18% to £324.6m, with wholesale sales suffering a 29% decline, although direct-to-consumer sales increased.
- The company has announced a restructuring plan, targeting £25m in savings, largely through staff reductions.
- A change in leadership will see Ije Nwokorie assume the role of CEO in January, following a successful refinancing deal.
In a noteworthy financial period, Dr Martens has revealed a pre-tax loss of £28.7 million for the 26 weeks leading up to 29 September, contrasting sharply with a profit of £25.8 million for the same period last year. This decline is largely attributed to an 18% decrease in total revenue, which has fallen to £324.6 million. Within this, wholesale sales were hit hardest with a 29% downturn, while the direct-to-consumer (DTC) segment now represents 56.4% of total earnings, an increase from 49.6% the previous year.
The performance across different regions has aligned with expectations, showing a 16% reduction in EMEA revenue, a 22% fall in the Americas, and a 12% downturn in APAC. The £28.7 million pre-tax loss was aggravated by exceptional charges totalling £9.2 million, primarily stemming from cost-reduction initiatives. As part of these measures, the retailer seeks to save £25 million by fiscal year 2026, with a significant portion expected from workforce reductions.
To bolster its financial position, Dr Martens successfully secured a refinancing agreement. This new deal incorporates a £250 million term loan coupled with a £126.5 million revolving credit facility, improving upon the previous arrangement which encompassed a £281.7 million term loan and £200 million revolving credit facility. The refinancing provides an initial three-year term, extendable by an additional two years, subject to approval, thereby offering further financial stability.
The company is also undergoing a leadership transition, as Ije Nwokorie is set to take over as CEO on 6 January. He will replace Kenny Wilson, who will continue to facilitate the handover until 31 March. In reflection, Wilson remarked, “This is a year of transition and we have made good progress with our four main objectives: pivot our marketing to a relentless focus on our product, turn around our USA DTC performance, reduce our operating cost base and strengthen the balance sheet.” Wilson also noted the decrease in both inventory and net debt, seeing the refinancing as a success which lays a foundation for the future.
The adjustments come as Dr Martens prepares to navigate the key trading period leading into the new year, with optimism around their new product lines. The forthcoming change in leadership is viewed as an opportunity to further stabilise and grow the company’s market position.
Dr Martens is in a transitional phase, striving to regain financial strength and stability through strategic initiatives and leadership changes.
