Dr Martens names new chief executive amid sales slump in the US
Dr Martens will see a change at the top as it looks to turn the tide on a miserable couple of years.
Aberdonian Kenny Wilson will step away from the top job after six years to be replaced by the iconic shoe manufacturer’s chief brand officer Ije Nwokorie.
Wilson’s tenure began with a bang, taking the shoe manufacturer public in early 2021 with a near £4bn valuation.
However, operations issues at an LA distribution centre and then weak consumer demand in the States took their toll on the share price, which now sits at around a fifth of the offer price.
Though the share price has slipped, revenues have spiked under Wilson, doubling the numbers of pairs sold during his tenure.
Wilson said the time had come to step away.
“Dr. Martens is an incredible brand powered by our fantastic people. After six years in the role, I feel that the time is right to hand over this year, and I am excited that Ije will be my successor. I have enjoyed working with Ije, both as a Board member and in the executive leadership team in recent months, and I have seen his brand knowledge and passion first-hand. I look forward to working with him closely in the year ahead.”
In a separate announcement, Dr Martens said it was trading in line with expectations but was continuing to be weighed down by lagging sales in its US market.
The iconic shoe maker said for the year ahead USA wholesale revenue is anticipated to be double-digit down year-on-year.
Dr Martens said: “We have recently finalised the Autumn/Winter order book, which makes up the majority of the second half of USA wholesale, and this is significantly down year-on-year.”
The firm said a decline in wholesale has a significant impact on profitability, and could result in £20m hit on profit-before-tax.
America is one of the business biggest markets but it faced a number of challenges in the region, including the hangover from bottleneck issues in its Los Angeles warehouse.
Dr Martens said: “Given the ongoing challenging performance of our USA wholesale business, we expect to continue to require the additional inventory storage facilities in this market through FY25, and therefore the majority of the £15m of additional costs incurred in FY24 are expected to repeat in FY25.”
FY24 results expected to be in line with guidance with profit before tax reaching of £97.4m
It comes after an investment firm, which owns roughly five million shares of Dr Martens, wrote to the board last month and suggested the company would perform better as a private company or as part of a larger, multi-brand holding company.
New York based Marathon Partners Equity Management, LLC argued the company’s stagnant growth and 83 per cent slide in share price since its IPO three years ago have not valued the company at its true worth.
Shares in Dr Martens are down 26 per cent in early trade.