Struggles in the US Cause Further Profit Loss
Dr Martens, the iconic boot brand, has issued its fourth profit warning, leaving shareholders facing a loss of three-quarters of their investment in just two years. The company cited ongoing struggles in the US as the main reason for the disappointing profits. Sales in the US have slumped due to the absence of post-Covid stimulus checks, which have impacted consumer spending. Additionally, distribution, manufacturing quality, and supply chain issues have further contributed to the decline in sales.
Shares Plummet by 25%
As news of the profit warning broke, shares in Dr Martens plummeted by as much as 25% before closing at 90.20p. This sharp decrease in share value now values the company at £1.1 billion, a staggering 75% below its listing price of £3.7 billion in 2021. The disappointing performance of Dr Martens adds to the growing list of London listing disasters this year, including Moonpig, Made.com, Music Magpie, and Deliveroo.
Early Signs of Trouble
Dr Martens' initial public offering in 2021 raised eyebrows due to the high valuation set by private equity firm Permira. The firm floated the boot brand for ten times the amount it had paid to acquire it in 2014. This decision resulted in a windfall of £1.2 billion for Permira and a £350 million payout for senior staff. Despite the profit warning, CEO Kenny Wilson expressed confidence in the brand's long-term growth potential.
A Brief History of Dr Martens
Dr Martens' iconic yellow-stitch boots were first made in the UK in 1960 and quickly gained popularity among punks, grungers, and modern pop stars. Over the years, the brand has faced various challenges but managed to stay relevant. However, the recent slump in sales and profit warnings have posed significant obstacles for the company.
Metro Bank Cuts Jobs to Boost Efficiency
Metro Bank, the high street lender, has announced plans to cut a fifth of its workforce and potentially end its seven-day-a-week opening hours. The bank aims to save £50 million to improve efficiency. The decision comes shortly after shareholders approved a multi-million-pound rescue deal. Metro Bank plans to simplify its operations and focus on "relationship banking" to build customer loyalty. Approximately 800 jobs are expected to be affected by the changes. The bank will also invest in automating services and improving its digital channels.
Microsoft Invests £2.5 Billion in the UK
Microsoft has announced a £2.5 billion investment in the UK, which will include the establishment of new artificial intelligence (AI) sites in London, the north of England, and Cardiff over the next three years. This investment, the largest Microsoft has made in the UK in its 40-year history, will also involve training one million people in essential AI skills. The company aims to ensure that the UK has world-leading AI infrastructure. The investment comes after Microsoft's takeover of Activision Blizzard was initially blocked by UK competition regulators.
Robinhood Trading App Coming to the UK
Robinhood, the trading app known for its role in the meme stock-buying frenzy in the US, is set to launch in the UK next year. The app will provide easier access to trade US stocks such as Tesla, Amazon, and Apple. However, users will not be able to trade cryptocurrencies or London-listed shares initially. Robinhood's entry into the UK market is expected to attract significant attention from retail investors.
Did you miss our previous article…
https://hellofaread.com/money/how-to-overcome-bias-and-support-workers-with-disabilities/
