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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
G: a;; bargain for someone to add a brand.
The customer-reported weaknesses centre around just two areas - product quality (durability) and Customer Service. After the "This is Money" website reported yesterday's results the comments section was full of comments on quality ("They ain't made like they were before" and "over-priced for poor quality boots" etc), and "Customer Service is rubbish".
So I went to the company's website to see how they're talking about these two critical areas. They're not. Nothing on CS improvement plans, and Quality is buried in Sustainability in the Investors area of the website.
Good management would be talking about quality standards on the Front Page: quality assurance, how changing factories is a challenge and how it's managed, tannery accreditation, sole injection accreditation, bonding test results, how sewing threads and upper trims are sourced and tested etc. It is not confidential information, and it's a significant concern, real or perceived, by real customers. Why ignore it in Corporate Communications? Why ignore it on the customer facing pages?
The Dr. Martens product is a simple one with only a few components that need to be bonded or stitched together. There's no excuse for getting this wrong (if they do) but even more so no excuse for not addressing a major concern head-on.
I understand that CS is harder to address at a corporate level since the sales are regional and local, but quality is global.
Difference being that Ryanair are the cheapest carrier around with customers still opting to fly with them rather than paying more for essentially the same experience with slightly better customer service. Dr Martens are supposed to be an iconic premium brand, so shouldn't be getting negative review on trust pilot and not dealing with them. Customers with a bad experience are unlikely to return to Dr Martens unlike service companies like Ryanair. My wife purchased a pair of Dr Martens brogues last year and after a year of very minimal use the sole had started separating. She took it into the local store and was basically told to go away, and that a repair would cost her over £80 at which point they went straight in the bin and she will likely never return as a customer. I still have a relatively new pair and we shall see how long they last - I suspect not as long as the previous ones. The company is clearly in a bit of a mess and have taken their eye of customer care and quality.
Leaving free carry. 86-95 done
Another embarrassment on the IPO front, launched at 370p and topped 500p. Less than 3 years later it’s dancing with 80p.
They hired a new CFO early this month in November and then promoted a non-exec (also a director at Apple) as the chief brand officer.