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Image courtesy of Dr Martens
Dr Martens today says its iconic brand is stronger than ever after a financial year in which direct-to-consumer sales were its top priority – and despite supply chain disruption. Almost half (49%) of Dr Martens brand sales were made direct to shoppers, with strong growth online and in its stores – and profitability rose as a result.
That came despite Covid-19 factory closures in south Vietnam – representing a third of its production – for more than three months during the year. At the same time, shipping times to the US nearly doubled. The brand responded by prioritising stock into its own, higher margin, direct to consumer sales channels. Covid-19 also hit demand in its smallest APAC region. However, 90% of production capacity is now up and running.
The update comes as Dr Martens today reports revenue of £908.3m in the year to March 31 2022. That’s 18% higher than in the previous year. Direct ecommerce sales were 11% up on the previous year and 92% ahead of its 2020 financial year, when only 29% of direct sales were online.
Own store sales recovered in markets where Covid-19 restrictions had been lifted, rising by 86% on last year, and accounting for 20% of sales – seven percentage points (pp) ahead of last time. It opened 24 new stores during the year and plans to open more in the coming year, especially in the US.
The fast growth in direct sales came alongside 5% growth in wholesale, while profitability increased as more sales were direct. Gross margin grew by 2.8pp to 63.7%.
The fastest growth was in the Americas (+29%) and EMEA (+19%), although sales in its smallest region – APAC region (-10%) – were affected by continuing Covid-19 restrictions.
At the bottom line, pre-tax profits of £214.3m were 207% ahead of last time.
Dr Martens chief executive Kenny Wilson says: “Today’s strong results have been driven by our proven DTC-first strategy and continue to build upon our track record of volume-led growth.”
He adds: “Our results were achieved against unprecedented Covid-19 disruption in our supply chain, which our teams navigated with flexibility and dedication. We have always said that driving brand equity is our first priority as it will ensure sustainable growth in the decades ahead. Our recent comprehensive brand surveys shows that our brand is stronger than ever, with significant growth in awareness, familiarity and recent purchase. Dr Martens remains incredibly underpenetrated globally, giving us conviction in our future growth ambition.”
Looking ahead, the brand now expects sales growth to be in the high teens in the coming year. In the medium term it aims to make 60% of sales direct to shoppers, with 40% via ecommerce.
Engagement strategy
Dr Martens continues to spend on marketing in order to build brand awareness and engagement. It has 9.8m followers across its social media platforms. That’s 8% up on last year. It says its Instagram engagement rate is strong in comparison with competitors, while it launched on TikTok last year and now has more than 300,000 followers, 18m views and 2m likes.
Sustainability strategy
Dr Martens aims to reduce the amount of waste it sends to landfill to zero by 2028, by which time 100% of the product’s it sells will have a sustainable end of life option. In April 2022, it started its first trial of more sustainable repair and resale services – and says early results are encouraging.
It also aims to make all footwear from sustainable materials by 2040.
During the last financial year, it focused on trialling alternative materials, invested in the way it measures its carbon footprint, sourced all of its leather from tanneries that have Leather Working Group accreditation and reduced the plastic content of its shipping bags.
Dr Martens is ranked Top500 in RXUK Top500 research.
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