Dr Martens shares slump as wholesale sales drop after supply disruption

Dr Martens has revealed a slowdown in sales for the past quarter after a drop in its wholesale business, which caused its shares to plunge.

The company saw its shares drop to its lowest since the company floated on the London Stock Exchange a year ago after it updated investors on Thursday morning.

The boot-maker reported that sales increased by 11% to £307 million for the quarter to December 31 against the same period last year, although this represented a slowdown from 16% growth across the previous half-year.

Dr Martens said it was impacted by factory closures in Vietnam and global shipping delays.

Chief executive officer Kenny Wilson said there has been “improvement in factories, shipping and ports” but admitted that disruption over the quarter impacted its wholesale revenues.

The company said reduced numbers of manufactured boots meant the firm prioritised its own website and stores, where profitability is better, over its wholesale operations.

It said it has recently boosted its wholesale supply following the easing of regional pandemic restrictions.

Wholesale revenues over the three-month period fell by 14% year on year, while its own online operation reported a 16% rise and stores saw 72% increase.

The retailer said it was boosted by store openings, as it opened 11 new locations to end the period with 158 stores.

It plans to continue this expansion programme with a target of 15 to 20 new store openings for the year.

Mr Wilson also told the PA news agency that the company will increase its prices by 6% during the summer after being impacted by significant cost inflation.

“We’ve highlighted this previously, but we have seen inflation pressures continue to rise across the board,” he said.

“Shipping and raw materials have increased and we want to pay our people more so these are all big costs we’ve incurred.

“We have increased our prices for about two years but will have a rise of about 6% in June or July, so that will be lower than inflation over that period.”

Shares were 11.1% lower at 287.4p after early trading.