Tapping into the buoyant footwear market.
Shoe sales are predicted to grow 3.9% annually to 2027 in the UK and this positive trajectory has helped revenues at Dr Martens break the £1 billion threshold for the first time in its 60-plus year history.
The company reported this milestone at its full-year results – for the 12-months to the end of March – that represents a 10% increase on the previous year. This reflects the company’s continued focus on direct-to-consumer channels, with such sales rising 16% to £520.7 million, versus a 4% decline in wholesale revenues. It was fuelled by the opening of 52 new stores in the UK and 14 franchise outlets in Japan transferring to Dr Martens control where DTC now accounts for 80% of the sales mix in that country. The company’s omni-channel strategy has also been progressing well with trials of look-up in-store inventory, click & collect, and the launch of a repair and resale service with Depop.
However, profitability of the group was impacted by its poor performance in the US, according to Kenny Wilson, CEO of Dr Martens, who stated: “Against the backdrop of a challenging environment we made operational mistakes such as the move to our LA Distribution Centre, and how we executed our marketing campaigns and ecommerce trading. We have undertaken detailed reviews to understand why these issues occurred and have begun to embed the lessons learned into the business.”
The US issues proved a drag on sales of the group’s iconic boots, with a decline of 10% across the group, but this was offset by strong demand for its shoes (up 51%) and sandals (up 54%). The company is looking to grow its presence in these categories and this broadening out of its offer will enable it to tap into the wider footwear market that is worth around £14 billion.
Marks & Spencer has its eye on the same footwear pie as it expands the third-party brands it sells on its website. The company began selling additional brands to complement its own offering in 2020 as it recognised that well-known brands dominate the footwear market, accounting for 76% of menswear sales and 45% of those in the womenswear category.
The latest batch of names to join the roster include Crocs, Toms and US-based Skechers that is heavily skewed to sneakers. There is no doubt that this is the hottest part of the footwear market with a popularity that has spawned a vibrant resale market.
Among the players in this field in the UK is The Edit that recently raised £4 million to fund the expansion of its online sneaker marketplace that sells new and used products of limited edition and rare products. Last year the company handled around 20,000 pairs of shoes generating nearly £10 million in revenue, which represents year-on-year growth of 500%. The beauty of the model is that the typical customer at The Edit will buy at least five pairs of sneakers a month and although the average sale price is £360 it is not unusual for this to reach more than £15,000 for certain products.