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.
The company, which was founded in 1945, first unveiled its new strategy earlier this year after a serious sales slump. Profit plummeted to £8.8m from £93m in 2024.
Analysts have pointed to bottleneck issues in America, plus too much of a focus on third-party e-commerce channels and a general downturn in demand.
Dr Martens has warned on profit several times over the last few years, and faced calls from an activist investor to consider selling up; its share price has fallen more than 80 per cent since its 2021 IPO.
Shares have risen nearly five per cent in the last week.
Dr Martens ‘still has appeal’
The company’s new strategy, “Levers for Growth”, will see it move away from a narrow focus on boots to a much broader approach targeting shoes, sandals and bags.
Chief executive Ije Nwokori, who previously served as chief brand officer, wants to shift “from a channel-first to a consumer-first mindset” and “optimise brand reach”.
Part of the reason analysts are optimistic about this strategy is the enduring weight of Dr Martens’ brand image: “[Dr Martens] remains one of the few globally relevant heritage brands that continues to resonate strongly with consumers,” they said.
“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 upgraded its target price from 80p to 112p.
The price was 81p as of August 18, although it’s still a far cry from the 450p IPO price, which valued the company at £3.7bn.
Goldman Sachs has previously called 2024 a “transition year” for the company, with progress on US sales, cost savings and inventory.
“[We] see a shift towards delivering on the return to sustainable brand growth as driving the story from here,” analysts added.
Investec analysts, too, have said that the “refocused strategy on being consumer-led rather than channel-led… should unlock a material profit growth story”.