Dr Martens profits tumble amid US supply problems

theguardian.com:

Dr Martens said it has struggled to sell its chunky lace-up boots in the US and admitted attempts to correct “mistakes” in its American supply chain had triggered a slide in its annual profits.

The British bootmaker said it had faced falling demand in the US, blaming what it called a “challenging consumer environment”, as shoppers reined in their spending in the face of high inflation.

First created in 1945 by a young German army doctor, Klaus Märtens, who designed an air-cushioned sole to help his recovery from a broken foot, the boots were first introduced to Britain in 1960 by a Northamptonshire footwear maker.

Their sturdy design meant they were initially adopted by postal delivery workers and factory staff, but the classic eight-holed 1460 boots also quickly found favour with punks.

In the past 12 months, the footwear group has been battling growing costs of £15m at its Los Angeles distribution centre, which opened last year.

This caused its annual profit before tax to tumble by 26% to £159m, as a result of slower sales growth, investment in new stores, marketing and staff, as well as rectifying the US warehouse problems.

Dr Martens blamed “operational mistakes” including the move to its LA warehouse for some of its problems across the Atlantic, including supply chain bottlenecks that forced it to open temporary US warehouses in late 2022 to deal with stock.

Kenny Wilson, the Dr Martens chief executive, said the company had “undertaken detailed reviews to understand” why it had experienced problems in the US, the brand’s largest country by revenues.

“We are fixing the issues in America, including a significant strengthening of the team there, and returning America to good growth is our number one operational priority,” he