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All time low now so share buy backs not working.
It is always darkest before the dawn.
GLA
Wigan warriors; totally agree with your thoughts. You mention Birkenstock, who ultimately are owned by LVMH - as you say luxury brands, nurture the provenance of product for long term gain, not a quick profit. I'd be happy with that long term vision.
Idakeinis; thanks for pointing me in the right direction RNS wise. Doesn't change the point, if it was valuable then, we'll do it again, now it's even more valuable
Well, I accept that you can outsource to China et al, and get decent quality. But why take the risk (part from PE priming the ship for an IPO), when you have a longstanding quality brand. How many quality clothing brands risk their reputation and outsource. You won't get high end Italian bags, watches, general fashion outsourced, they are either run by many generations of family businesses, or have been acquired by the big fashion conglomerates.
PE squeezed every last drop of short term profit out of Doc's, then sold. Doc's would be better totally re shored to UK for manufacturing, invest in good e-commerce systems, modern state of the art factory facilities and pay decent salaries. That way they could manage their distribution with simpler supply chains, and more predictably. Peak globalisation is unwinding.
Take Birkenstock as a similar model, all manufactured in Germany, good worker conditions, top brand, strong margins and management that are taking a long term view of a profitable business.
Of course, this would take some undoing of contracts etc., but a long term buyer (not PE) with this vision will be richly rewarded in 5yrs, or so, with a valuable brand and ongoing revenues and margins to match.
Share buyback programme was to purchase £50m worth of shares. That figure must have been reached. See RNS 15th December 2023.
Not really a fan of buybacks generally, and whilst happy to wait patiently for the value here to be realised, I do note they have stopped, which concerns me. Why are buybacks viable at 90 or 93p because you think they are accretive/the business is undervalued, but then not at 80p?
Says to me, they are either being used to massage perception.....or they are struggling for cash. If it's neither of these, it doesn't instill confidence in me with regards to the ability of management.
Topped up at 79.5p in advance of trading update.
It is always darkest before the dawn.
GLA
By Stephen Wright. After an 80% decline since its IPO, I think Dr. Martens (LSE:DOCS) are good value. There are two reasons why the stock has been falling – weak consumer demand in the US and bad execution of its online business.
The risk is that this could continue for some time. But with management guiding for revenues declines in 2024, I think a lot of bad news already baked in and the stock looks attractive – that’s why I’ve been buying it.
I also think the market is mispricing the possibility of an interest rate cut in the US this year. If that happens, consumer spending might improve more quickly than people anticipate.
I don’t know whether the stock has reached its low point yet. But I do know that it’s reached a level where I think the shares looks very attractive from a valuation perspective – attractive enough for me to have bought, anyway.
Stephen Wright owns shares in Dr. Martens.
Docs website says 25th - I trust that rather than LSE list. That says Burberry update on 19th when it was out Friday.
I think: hold, collect divis, wait for takeover…
In here it says 18/1
https://www.lse.co.uk/news/DOCS/
Trading up is scheduled for 25 Jan. Do I bin these shares off now
Given the Red Sea issues, maybe having too much inventory isn't quite such a bad thing at the moment?
Nike recently gave a profits warning,today JD Sports gave a profits warning...America a particular problem..Doc is heavily dependent on US sales....A profit warning is coming in January...SELL asap
Just came back from Italy. a pair of dm were around 170euro (on sale). kids seem to be crazy for them
Day is tomorrow...
I’ve purchased over 20 pairs of docs over the last 30’years. From memory, each pair where the sole has split / come away was made outside of the UK. The label in a few stipulate Vietnam. I agree with Slomo that it appears they may not be investing too well in providing good foreign quality control.
In my case, when the sole first start splitting I took it to the shop and the assistant advised that he saw a lot of them being returned for that reason and simply replaced them. I was happy that they was aware and didn’t quibble. Several splits later in more recent shoes. Customer services no longer let me return them or even provide a discount from future products . Some was marginally outside the 12 month warranty but only a calculated 15-20 hours of usage.
The reason I’m saying all of this is that i’m worried about problems in there core business. IF docs, or any other company, don’t provide proper due care, own issues and provide good customer service then it’s very easy for them to lose their USP and become like any other brand surviving on lower margins I hope I’m wrong.
I need to see some confidence before reinvesting..
The problem comes about when those who are engaged to do the work then sub-contract and quality becomes more variable. Quality control and proper oversight are vital. When they manufactured in UK it was all well controlled. Distance makes it more difficult and more important to ensure quality is maintained. Also copy-cat manufacturing leads to problems for any company...
1. Dr. Martens
Shares
Shares in this British bootmaker have lost 75% of their value since 2021 after several profit warnings. While the record is discouraging, on nine times earnings the risks look priced in. Revenue has risen by an average of 14% per year since 2020, but the execution has been poor. If management does rectify operational problems, then there could be decent upside for the shares, but even if it fails to do so, the firm could well attract an “opportunistic predator” that recognises the “untapped” potential of this iconic brand. 92p
@Retec
Chinese manufacture doesn't necessarily mean poor quality, and UK made doesn't necessarily mean high quality. It's a lazy old trope - plenty of excellent quality stuff comes out of China; if Doc Martens have poor quality then that's poor sourcing
iphones are mostly made in China - have you ever had one that has failed? (I haven't, though that's tempting fate given I access almost everything on there)
The boots used to be made solely (forgive the pun) in the UK... Now they are mainly made in Asia with only a tiny fraction of the production actually made in the UK (less than 1% of it's sales). Unfortunately we are all aware, or should be by now, that production was moved for manufacturing at a cheaper price (more profit)... but what goes along with that is the introduction of very unskilled labour and then ultimatelt cost cutting at their end to try and make more profit.. In the end the quality is 5hit and the only people that suffer are the consumers.. It takes a while for enough consumers to complain (typical British reaction "yeah meal is lovely thanks") and then it gathers pace rather like a snowball.
Fakes probably not, however DMs trade a lot off reputation built over the last 50 or so years. Unfortunately a lot of that reputation was built when solovair made DMs under licence which they haven't done for a good few years. As a buyer of DMs up until the mid 90s I can attest that quality, fit and finish has suffered a little in recent times. Still good, but not quite as good.
Is there any chance there are "fake" Dr Martins within the market....eg sold via Amazon etc .....and such "fakes2 are damaging the brand ??
Goldman Sachs cuts Dr Martens price target to 124 (145) pence - 'neutral'
Well done anyone buying yesterday in 80s
GLA