Dr. Martens faces historic low as counterfeits flood market
19 April 2024 16:07
The renowned shoe brand Dr. Martens has announced financial troubles. The company's shares fell to the lowest level in history. Analysts blame it on fakes sold through Chinese shopping platforms.
The Dr. Martens brand stated that it expects its wholesale revenue in the USA in 2025 to decrease by double digits compared with the previous year, considering the number of orders for fall and winter, reported CNBC.
On Tuesday, April 16, the company announced that its shares fell by 30 percent, reaching a record low.
Shoe giant in trouble
The company assumes that in 2025, revenues will decrease by a single-digit percentage year over year, citing the inability to offset next year's inflation facing the lack of further intentions to raise prices.
"Chief Brand Officer Ije Nwokorie is set to replace him in the top position. In a Tuesday note, analysts at RBC flagged a negative sentiment on the stock and said that markets would focus on the 2025 guidance in the short term. With mid-market consumers under pressure from inflation, there may also be trading down within the category, the analysts said," emphasized CNBC.
Counterfeits harm the brand
CNBC points out that at the beginning of April, the brand sued the Supreme Court, accusing the Chinese online store Temu of manipulating Google search results.
The assortment was reported to rank higher than the original shoes. Meanwhile, in 2021, Dr. Martens and other brands sued Shein for "a clear intent to sell counterfeits." For example, in Poland, original Dr. Martens cost about £160-£180, while Chinese fakes cost about £20.
