DTC expansion drives revenue and profit growth at Dr Martens
today Aug 27, 2019
Greater investment in Direct to Consumer channels, a focus on global growth and a strong product strategy helped Dr Martens post “outstanding” results for the year ended 31 March 2019.
The British footwear brand, best known for its grunge boots, saw group revenue rise by 30% to £454.4m during the period, fuelled by double digit growth across all channels and geographies, in particular e-commerce.
During the year, the brand focused on growing its Direct to Consumer channels by opening 20 new stores in Europe, Japan and Hong Kong to drive the retail channel and investing in improved functionality in order to give its e-commerce presence a boost.
The strategy paid off, with DTC revenue rising 42% to £199.4m, with retail revenues growing 30% and e-commerce sales up 67%. DTC channels now represent 44% of total revenues, up from 40% in 2018.
The brand’s wholesale business, which continues to be the biggest revenue driver, also experienced a jump in sales. Wholesale revenue increased 23% on the previous year as a result of increased focus on larger, “best fit” partner accounts, the company said in a press release.
GLOBAL GROWTH, THE RIGHT PRODUCT
In the 12 months to the end of March 2019, 77% of Dr Martens’ revenue was generated outside of the UK - a figure that will surely give the brand a sense of stability ahead of of Brexit.
In fact, the brand is performing well in all regions. EMEA reported a 32% increase in sales to £206.2m during the period, while the Americas saw a 37% uptick to £161.1m. Sales in Asia grew 16% to £87.1m.
Additionally, Ebitda was up 70% on last year, reaching £85m, helped by a 4.4% improvement in Ebitda margin to 18.7%.
“This has been another outstanding year for Dr. Martens and I am incredibly proud to be leading such an iconic and authentic brand. With our relentless focus on the consumer and a mindset of continuous investment, we are committed to growing the brand for the long term while staying true to our purpose of empowering rebellious self-expression,” said Kenny Wilson, CEO of Dr Martens.
“By putting consumers first, accelerating our DTC expansion and improving our operational performance we have delivered double digit revenue growth in all of our key markets and strong Ebitda performance,” he continued.
But why do Dr Martens boots, which became popular in the 1990s as part of the grunge fashion movement, continue to appeal? The footwear firm said the Originals category remains a key focus of the business, but it has also been simultaneously building its Fusion range, which grew by 84% powered by a growing sandals business and newer chunky platform shoes.
The strategy seems to be working for the shoe company, which expects to see further growth in financial year 2020.
“We look forward to the year ahead, during which we expect to deliver continued strong growth and accelerate the many positive trends seen in the past year,” CEO Kenny Wilson announced.
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