Dr Martens will raise the price of its boots by 6% as the cost of labor, energy and consumables, including bouncy soles and leather, has risen.
The Northamptonshire shoe group has been raising prices for the second year in a row on classic boots, which currently cost around £159, adding £10 to the price. The increase will come next fall to reflect the higher production costs the company has now recorded over the next year.
Announcing half-year results, Dr Martens reported a disappointing 5% drop in pre-tax profit in the six months to September 30 despite a 13% increase in sales as the company said it had invested more in marketing, personnel and new stores.
The firm said sales of around £10m expected over the period were delayed due to strikes at the Port of Felixstowe and staffing shortages at its distribution center in the Netherlands.
Kenny Wilson, chief executive of Dr Martens, said he was “very confident in our forecasts for Christmas.”
He said the group is still seeing an increase in supply costs “across the board,” from the oil-based product used to make the outsole to leather and energy.
“We will only raise prices to cover inflation. This year we raised prices for the first time in two years and will cover inflation next year,” added Wilson.
Staff costs are on the rise and Dr Martens is offering a £500 bonus paid out during October and November to around 2,000 of its 3,500 employees worldwide. The payments will go to employees who work at least 20 hours a week and earn less than £45,000 a year, from the UK factory and head office to purchasing teams in the US, Europe, South Korea and Bangladesh.
Wilson said the company was paying because its workers were facing “very tough levels of inflation” around the world: “At the end of the day, people are the differentiator. We have a very passionate workforce and we wanted to show that we care about the people who work for Dr. Martens and actions speak louder than words.”
Shares fell nearly 24% as the company warned of “volatile trading” in recent weeks, due in part to mild fall weather in the UK and Europe, and said profit margins would suffer.
John Stevenson, retail analyst at brokerage Peel Hunt, said the numbers indicate “some concern about clothing inventory during peak trading, reflecting these higher inventory levels and inclement weather.”