Wilson will depart at the end of the current financial year to make way for Ije Nwokorie, currently chief brand officer at Dr. Martens, to assume the position of CEO.
The two will work together for a smooth handover with Nwokorie taking the helm of the company before the end of the current financial year.
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Paul Mason, chair, said “Kenny’s contribution to Dr. Martens has been immense. He has spearheaded a brand-first DTC-driven strategy, achieving significant growth, with pairs more than doubling during his tenure. With his focus on product, brand and custodianship he has instilled a strong culture through the organisation. I am grateful that he will ensure an orderly transition to Ije over the coming year, alongside our incoming CFO Giles Wilson.”
Lynne Weedall, senior independent director and chair of the nomination committee, said “Ije is an inspirational leader and his experience in helping drive DTC-led growth at Apple will be highly relevant in the coming years. He knows the company well, having been a non-executive director for three years and we are already benefiting from his brand expertise since he joined as CBO in February. We are delighted that he will be the next CEO.”
Nwokorie added: “We have a phenomenal brand, an excellent product range and a passionate culture. I am looking forward to working with Kenny through this transition year.”
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Dr. Martens is due to announce its FY24 results on 30 May and said it expects them to be in line with guidance and consensus expectations.
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By GlobalData“As expected, we saw a pick-up in direct-to-consumer (“DTC”) in Q4, to high single-digit year-on-year growth, compared with a 3% decline in Q3 (all on constant currency terms). This was as a result of good growth across EMEA, a flat outcome in the USA and a very strong result in APAC, led by Japan. Q4 Group wholesale performed in line with our expectations,” the company said in a statement.
The group is exercising a cautious view toward the upcoming financial year.
USA wholesale revenue is anticipated to be double-digit down year-on-year with the finalisation of its autumn/winter book “significantly down year-on-year”.
“If wholesale customers become more optimistic, we could see in-season re-orders, however, these are hard to predict. Given the nature of wholesale orders, the full benefit of any restock always has a lag into the following season. The decline in wholesale has a significant impact on profitability, with a base assumption being in the region of a £20m PBT impact year-on-year, assuming no meaningful in-season re-orders.”
Single-digit inflation in cost base and investment in retaining and increasing talent equate to a year-on-year PBT headwind in the region of £35m. Prices are unexpected to rise and therefore Dr. Martens is unable to offset cost inflation the way it has in previous years.
It is expecting at least £15m in costs on the back of increased inventory storage facilities resulting from wholesale weakness in the US business.
Revenue is expected to decline by single-digit percentage year-on-year.
Profit Before Tax in “worst case scenario” is expected to come in around one-third of the FY24 level.
Wilson said: “The FY25 outlook is challenging, and the whole organisation is focused on our action plan to reignite boots demand, particularly in the USA, our largest market. The nature of USA wholesale is that when customers gain confidence in the market we will see a significant improvement in our business performance, but we are not assuming that this occurs in FY25.
“We have built an operating cost base in anticipation of a larger business, however with revenues weaker we are currently seeing significant deleverage through to earnings. Against this backdrop, we will be laser-focused on driving cost efficiencies where possible. We also have a number of ongoing investment projects which will deliver results in outer years. We continue to believe in our DTC-first strategy and the considerable headroom for growth. Our brand remains strong, and we have a compelling product pipeline. These all give us confidence as we look beyond this transition year into future years.”
Earlier this month New York-based equity management firm Marathon Partners urged the bootmaker to seek out strategic alternatives, as an industry expert suggested the brand’s “high” market value positions it as a lucrative investment opportunity for potential buyers.
