Dr Martens did not rule out the possibility of job cuts, after announcing plans to cut up to £25m in costs to counteract weak US sales.
The British footwear company said that its latest cost-cutting program would aim to save £20m – £25m through streamlining operations and better supply contracts. The bosses will also improve “organisational efficiencies”, signaling that the company could consider job cuts among its 3,600 global employees.
Kenny Wilson said that it is possible that the plan to reduce costs could result in job loss for the company’s staff who are located in many countries, including the UK, Japan Italy, Germany, and the US. Executives are expected to provide more details about the firm’s plans in November.
In the meantime, Dr Martens – famed for their yellow stitching – revealed that they were halving the dividend payments to shareholders. Profits fell 43% in the 12-month period ending March and revenues dropped 12.3%.
Sales of sandals, shoes and boots, which make up at least two thirds of the total, have fallen, mainly due to poor trade in the US.
Wilson, who will step down in spring next year, stated that many other boot brands have seen a decline in sales in the US. He added, however, that Dr Martens has made mistakes and plans to spend more money on marketing in the months to come. He said that the US consumer market was tough.
Wilson said that after two years, the supply chain costs had been “under control”. Wilson said that the results were expected and reflect “continued weakness in USA consumer demand”, affecting the company’s consumer and wholesale business.
But Dr Martens, whose profit warnings have been repeated in recent years, warned that there would be more pain ahead, as the group’s revenue is expected to fall by 20% between April-September.
Wilson stated that “we are clear we need drive the demand in the USA for us to return to growth”. Wilson said: “We are executing a plan with increased USA marketing investments and refocused USA marketing in the coming year.
I am confident that our actions as we begin this year of transition, will prepare us for the future.
The brand is a popular one with a long history. It was created by a young German Army doctor named Klaus Martens in 1945, when he designed an air cushioned sole for his own recovery after a broken leg.
In 1960, they were introduced in the UK. Their sturdy design gained popularity among factory workers and postal delivery staff. Skinheads and punks then adopted them.
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