Market Analysis: Dr. Martens & Pets At Home

Dr. Martens: Weak Demand and Reduced Shelf Space with Wholesalers; Refocusing Needed from Trend-Driven Designs to Iconic Products; Low Awarenessin the US Market. Pets at Home: Normalization of Pet Population After COVID; PromisingVet Growth Strategy; Rising Minimum and Living Wages to Squeeze Margins

In the luxury space, Yanmei Tang, Analyst at Third Bridge remarks on Dr Martens, informed by insights from industry experts:

"Dr. Martens has seen sharp drops in sales growth and profits in recent quarters, hit by weaker demand for boots in the U.S. and reduced shelf space with wholesalers. Our experts point to a post-COVID shift toward comfort, which has made Dr. Martens' stiff, hard-to-break-in boots less popular with shoppers.

"Dr. Martens has moved away from its iconic boots to focus on trend-driven designs like chunky soles, zippers, and bold silhouettes. While this has created buzz and attracted one-time buyers, experts warn it’s a short-term strategy. To secure long-term growth and reset their foundations, they recommend reinvesting in iconic products, innovating for quality, value, and comfort, and building the category for boots to attract loyal customers with higher lifetime value.

"Dr. Martens' brand strength came from its iconic connection to music, giving it lasting cultural relevance. Recent shifts to fashion-based rebellion lacked this depth. Experts suggest returning to music ties to reinforce their iconic products and ensure long-term growth.

"In Europe, Dr. Martens is the go-to brand for boots, but in the U.S., awareness is low. Competitors like Steve Madden and Aldo have filled the gap, and Dr. Martens hasn't fully invested in brand recognition.

"Their store expansion strategy doesn't work in America because the U.S. has a lower population density than Europe. Our experts suggest they should rightsize the stores to free up capital for marketing spend, focusing more on performance marketing, direct-to-consumer through e-commerce, and building brand equity for their iconic product and the boot category overall."

In the UK pet market, Alex Doran, Analyst at Third Bridge comments on Pets at Home:

"The pet population is expected to normalize following significant growth during the COVID years, as more workers return to offices and the cost-of-living crisis continues.

"The Pet Club provides valuable insights into their most loyal customers. Our experts say the focus should be on growing wallet share among these high-value customers by offering subscription services and targeted products.

"Pets at Home’s vet growth strategy is promising, offering convenience with in-store services and the potential to drive product sales through vet recommendations. While the vet market is fragmented, their national reach gives them an edge. The challenge lies in raising awareness of these services among consumers.

"Rising minimum and living wages will squeeze Pets at Home’s margins, but there’s room to grow profits by boosting own-label and accessories sales. The new distribution center could also cut operational costs.

"The biggest challenge for Pets at Home will be overcoming the perception of being a secondary option for the average consumer. Supermarkets, Amazon, and Zooplus lure shoppers with convenience and low prices. But Pets at Home stands out with expert staff offering personalized advice—something rivals can’t match."