“Dr Martens (LON:DOCS) 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.
Dr Martens' Operations Might Get Disrupted By Shipping Delays
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.
At the 2021 SALT New York conference, which was held earlier this week, one of the panels on the main stage discussed the best macro shifts coming out of the pandemic and investing in value amid distress. The panel featured: Todd Lemkin, the chief investment officer of Canyon Partners; Peter Wallach, the managing director and Read More
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.’’
Article by Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown
About Hargreaves Lansdown
Over 1.6 million clients trust us with £132.9 billion (as at 30 April 2021), making us the UK’s largest digital wealth management service. More than 98% of client activity is done through our digital channels and over 600,000 access our mobile app each month.