Surging costs and falling demand put boot into Dr Martens
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Rising costs bring Dr. Martens in top position: British brand raises price of its classic boot to £169
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Dr. Martens raises the price of its boots for a second year as it combats skyrocketing costs of labor, energy and supplies.
The British bootmaker, whose classic lace-up design costs £159 a pair, adds £10 to the price.
It came as its shares crashed 22.7 percent, or 65 pence, to 221.7 pence as it warned higher costs and a slowdown in demand would weigh on earnings.
Rising costs: Iconic British shoemaker Dr. Martens has raised its prices for the second year in a row
Dr. Martens said pressure on shoppers increased in the six months to Sept. 30, with sales growth being “slower than expected.”
Profits fell 5 percent to £57.9 million.
The shares are down 42 percent since joining the London Stock Exchange in January 2021 at 370p.
It boomed on its debut, following a transformation for the brand from top fashion for punk rockers 40 years ago to a must-have for supermodels like Gigi Hadid and pop stars like Rita Ora.
Interactive Investor’s head of investment, Victoria Scholar, said: ‘The pressures of inflation and the consumer slowdown seem to be catching up.
“It hopes to boost sales around Christmas, but from January it could become more challenging.”
But boss Kenny Wilson said it was “well positioned for future growth.”
He said customers were not deterred by higher prices and stuck to expectations that sales growth this year would be in the high teens.
He said, “This is the strongest brand that has ever been.
“We opened 21 stores, increased marketing spend and paid a cost-of-living bonus to a large portion of the workforce.”