Dr Martens is ‘making headway’ on its ambitious turnaround plan, with an ever-more positive outlook for the boot company, according to a City broker.
“The debate is not whether [Dr Martens] can recover, but rather how long it will take… the process has already started,” Peel Hunt analysts said, as reported by City AM.
The firm, which was established in 1945, first revealed its fresh strategy earlier this year following a severe sales decline.
Earnings collapsed to £8.8m from £93m in 2024.
City experts have highlighted supply chain problems in America, alongside an excessive reliance on third-party online platforms and a broader decline in consumer appetite.
Dr Martens has issued profit warnings multiple times in recent years, and encountered pressure from an activist shareholder to explore a potential sale; its stock price has tumbled more than 80 per cent since its 2021 flotation.
Shares have climbed nearly five per cent over the past week.
Dr Martens ‘still has appeal’
The business’s fresh blueprint, “Levers for Growth”, will see it pivot away from a concentrated emphasis on boots to a significantly wider strategy encompassing shoes, sandals and bags.
Chief executive Ije Nwokori, who formerly held the position of chief brand officer, aims to transition “from a channel-first to a consumer-first mindset” and “optimise brand reach”. Part of the reason analysts remain bullish about this approach stems from the lasting strength of Dr Martens’ brand heritage: “[Dr Martens] remains one of the few globally relevant heritage brands that continues to resonate strongly with consumers,” they noted.
“Sales momentum is now starting to turn, driven by management’s consumer-led and product-focused strategy… wholesale order books have positive momentum and US direct-to-consumer is back in growth.
“The investment case is looking increasingly positive, in our view,” analysts added. Peel Hunt raised its target price from 80p to 112p.
The share price stood at 81p as of August 18, though this remains substantially below the 450p flotation price, which had valued the business at £3.7bn.
Goldman Sachs has previously described 2024 as a “transition year” for the firm, with advancement in US revenues, cost reductions and stock management.
“[We] see a shift towards delivering on the return to sustainable brand growth as driving the story from here,” analysts added.
Investec analysts have similarly observed that the “refocused strategy on being consumer-led rather than channel-led… should unlock a material profit growth story.”
