Dr. Martens Share Discussion Threads

[castleford tiger] 18/4/2024 16:32

one of the biggest problems is that the product now made outside the UK ( most of it) is not so good.

take a deep dive and have a look.

best
tiger

[clocktower] 18/4/2024 14:41

Well your buying a pig in a poke, as you really are just assuming this will recover because everyone buys shoes/sandels/boots - footwear in general, rather than considering the plan the company was working too, which has got them into the mess that has over the last 12/18 months shown it's head. It is going to cost a considerable sum to try to correct the situation, and it will be huge wrote downs, from all sections.

How much stock is purchased from the far east, what percentage is made in Europe, what effect will it have on staffing and will there be large redundancies?

[g2theary] 18/4/2024 09:15

I've added today in for the short term bounce and possible hostile takeover which will be over a billion MCAP :)

[woozle1] 18/4/2024 09:00

It was a strange warning and looked like an attempt to kitchen sink all the bad news for the new CEO (certainly any incoming CEO would not want to be landed with the outgoing CEO's errors). A comment in the Times was interesting, describing Kenny Wilson as starstruck by the US and hence the over-expansion.

The facts are EMEA and APAC,(the latter is the largest market for shoes globally) are doing well. Japan is a good market for DTC because such a large proportion of the population lives in the largest cities and winters are cold. I expect Docs to continue to do well there.

The US is not because wholesalers (read dept stores) are not ordering. It seems strange, therefore, that they loaded up with even more new stock. It may be that Docs was already committed to these orders and could not avoid this issue. Or that there is not a big market for boots on the West Coast (see below).  

In the 2024 H1 the company said "Our inventory is too high and will now right size
through FY25". Well, that statement looks wide of the mark.

Most branded products rely on some form of wholesale in the US as it is not feasible to cover the smaller metros economically. That's a simple fact of doing business in the US and even companies like GAW make a very large proportion of their sales through this channel.

The US is the largest economy as measured by GDP per capita. However, the decision to over-expand on the West Coast looks like a mistake and that the LA DC was poorly conceived. Warmer temps will dull the appetite for heavier boots and maybe they are selling more sandals there. I suspect this DC is draining the US performance and I would not be surprised if it shut down. Geography may be a dull word to brand consultants but it matters. I would hope that Permira makes this argument.

I own from £1 and will buy more. I think this is a relevant brand that has been around a long time (unlike Super Dry) and so long as the company continues to nurture it (and not indulge in massive discounting) I see no reason that it can not recover. And the balance sheet is in reasonable shape and should allow them to ride out this patch.

[kaos3] 18/4/2024 07:01

i wonder why california... there is no money there but for a few... and they do not buy dr martens in loads. every person needs just so many pairs

california is posh on the surface but in huge debts, smart people are leaving, those who can not afford to leave .... they stay and they will not be buying

also wages and taxes are huge /compared/, real estate is expensive etc...

retailers closing their stores

which tells me all about the current dr martens management and its attitude... and results show

the only positive why california is probably logistics ... port entry....

[papillon] 18/4/2024 02:22

free stock charts from uk.advfn.com


DOCS log chart. Great way for long term holders to lose money!

[clocktower] 17/4/2024 22:11

On a post here many months ago, I pointed out about how they had pulled out of the traditional steel toe protective workwear and in doing so lost their traditional custom builder merchant outlet, and it is those sorts of decisions that start to undermine the business, as they became reliant of fashion items.

The management need to be removed immediately as they got the business into the mess it is now in.

[clocktower] 17/4/2024 22:01

The only hope for the company over then next couple of years, is to be decisive and withdraw from the USA.

I know they will not have the balls to make such a drastic decision, so either someone buys the business thinking they can turn it around, and like the Bodyshop, it has had it’s day and whoever takes it on will suffer the same sort of fate, until such time that all that remains is the brand value and maybe the core UK production facility.

The question is at what price with a bidder enter?

Let’s look at SDY over 19 million items of excess stock is still being cleared, Doc’s are stock piling to what end?

If wholesale buyers know they have piles of excess stock, the only way they will take it off their hands is at a huge discount and possible extended payment terms, in fact if the company had any sense, rather than take on storage that will result in extra distribution costs in the longer term, they would be better off offering to supply their wholesale customers with stock on very generous payment terms, so they in turn can offer their customers a wide choice of styles and sizes, which in normal circumstances they would be unlikely to have such a large stock holding.

On top of that the company should offer promotional support to retailers on a $ for $ basis, to ensure they market Doc’s in all advertising and window displays, and run competitions for things like best window displays.

I could continue with a long list of other actions that could put the company in a f are better place than they now find themselves in due to their failure to take steps much earlier, and that can be put down to the sales/ marketing leadership not taking a leadership role.

[ny boy] 17/4/2024 16:00

Retailers are all struggling but one trick ponies need to find a way to survive, it’s grim, unemployment will rise into year end

[huckers] 17/4/2024 12:02

iTisOnlyMoney. Thanks for all that, appreciated. I'll keep watching and reading the board.

[itisonlymoney] 17/4/2024 11:50

darrin, thanks for the detail on the new ceo. Btw, does that look like the profile for a good fashion brand ceo? Big salary maybe. I have doubts. a senior director for apple retail - he's had lots of people around him to generate any success there. snr directors like to take all the credit if things go well, but out on their own, they often fail, so he's an unknown quantity at this point. does anyone here know how he did at wolf olins?

huckers, I've asked the same question. my instinct atm is that this fifth profit warning and the change of leadership (a necessary move) with an untested ceo who has apparently been on the board (as a non-exec rather than ops management) throughout this car crash, creates massive uncertainty on top of the forecast for much lower profits. there's nothing but shifting sand under the strategy and the forecasts, plus the global environment does not look good - major european war which it looks like russia will now win, and the prospect of a middle eastern war.

Docs has a high valuation based on its brand appeal but the retail market is not validating that appeal by buying the boots in huge numbers, so i think the share price has to reflect actual profit without a brand premium. that's my thinking and that leads me to guess that the share price is going steadily down for sometime now. i haven't got the confidence in that prediction to actually short the shares though, because there's no telling when a bid for the company could come. right now i'm watching. if the share price gets to 30p, i will almost certainly be a buyer.

[huckers] 17/4/2024 10:21

Opinions sought. Is this a buy at some point? And if so at what price?

[disc0dave46] 17/4/2024 10:04

Tiger"I am not sure they will do as well as that as trade was dropping at Xmas."They've said DTC improved Q4 and they are in line with guidance and consensus expectations - guess we will know next month but would expect no new surprises for FY24 (it can't get much worse can it, lol).All the best

[clocktower] 17/4/2024 08:05

Rather than build inventory,they would be better cutting production and reducing costs, not building stock that they are more than likely having to discount in the future to save warehouse costs. Then they are more than likely to cut production and staff, which will be painful and costly.

[darrin1471] 16/4/2024 22:02

"new ceo seems to have been in charge of marketing"

Ije has only been the Chief Brand Officer since February.
An independent non executive at DOCS since the IPO.
A senior director of Apple retail for the last 6 years (40 stores)
11 years at brand consultancy agency Wolff Olins. CEO for 3 years. 150 employees.
Trained as an architect in Nigeria and the US.

The problems at DOCS appear to go beyond the "brand". Strategy (DTC), stock control and distribution to name a few.

Far to many risks and variables for me to invest

[castleford tiger] 16/4/2024 21:45

Hi pal
It’s certainly a mess. I am not sure they will do as well as that as trade was dropping at Xmas.
I think you are wise but at some point there maybe an opportunity.
Internsl controls etc seem all over the place. Get a few MPAC OR HSP.
Market wobbling do better save some cash to pick up some cheap stuff.
All the best

[disc0dave46] 16/4/2024 20:21

Hi TigerI'd got £133m pbt less about £5m for fx gives about £96m pat for FY23, that's about 9.7p eps and I made it circa 10.1p with their buybacks. They did say in late Jan Q3 that they were in line with their forecasts for FY24 as per their November guidance (which is what I went with).If FY25 profits are a third then call it 3.5p eps, even a generous rating of 15x is only 52p. Going on today's outlook they don't seem to really have a clue one way or the other as to their FY25 numbers and I'm staying well clear now.

[castleford tiger] 16/4/2024 18:45

The big question is what will the full year numbers come in at/

half was was about 25 million but did we get to 50m for the year?

They say current year might be 1/3rd of last year. That could be as low as 39m (fy24) so as low as £13m for 25

Why do they need all the extra storage?

share buy backs just wasted a load of money.

My target was always £1 and once there i have just watched.

Now i think it needs a rescue as WHAT IF sales dont pick up?

best avoided

Tiger

[disc0dave46] 16/4/2024 18:00

CTYes and will say I was challenging your call of 50p, but you were spot on.Now off my watch list, had a TP of 152p if all went to forecast which clearly it won't, and FY25 profits down two-thirds makes your 50p and it's still too pricey.Congrats but there will be folks suffering today so gloating too much isn't really appropriate.

[clocktower] 16/4/2024 17:45

No NYB why would anyone hold that trash.

[ny boy] 16/4/2024 17:41

CT you still holding MIN, just asking for a lonely toplou mountain goat 🐐 😆

[clocktower] 16/4/2024 16:55

When I set a target of 50p there was derision from some on this thread but before long it may well be there or below, and in a year or two could go the same way a SDY imo.

The USA eats them up and spits them out, time and time again.

[kemche] 16/4/2024 14:35

The new CEO looks like baking in a 6th profit warning.

[essentialinvestor] 16/4/2024 13:25

As mentioned previously, gearing up the balance sheet (buy backs/aggressive store expansion) was unlikely to end well
given recent trading updates.

I could understand the rationale IF sales were powering ahead, but DOCS had already suffered multiple set backs.