Hard times for Superdry and Dr. Martens

British fashion giants Superdry PLC and Dr. Martens fell by over 25% in London on Tuesday. The fall came in a markedly bearish market, with the FTSE 100, London's main stock market index, losing 1.2% to reach its lowest level for a month.

Dr. Martens at the bottom 

Shares in fashion giant Dr. Martens PLC fell by 25.2%, dragging the personal goods sector down by 4%. The maker of the well-known shoes announced another difficult year in its US segment, posing a challenge to the future CEO. The group is facing massive destocking and a reduction in orders in the USA. Wholesale customers are showing restraint in the face of economic pressures. The company, whose lace-up shoes have been fashionable since 1960, has appointed brand manager Ije Nwokorie as its next CEO.

A succession of worrying profit and earnings warnings prompted investor Marathon Partners to call for an immediate strategic review earlier this month. As a result, the share price hit a record low of 65.50 pence in early trading on Tuesday.

Kenny Wilson, who has been at the helm of the group for six years, declared that this year would be his last as CEO, without however giving a precise date for the handover.

Dr. Martens said its results for the year to March 31, 2024 would be in line with market expectations, but pointed to another challenging year ahead. "The outlook for FY25 is challenging and the whole organization is focused on our action plan to revive demand for boots, particularly in the US, our largest market," said Wilson.

"The nature of wholesaling in the U.S. is such that when customers gain confidence in the market, we will see a significant improvement in our business performance, but we don't assume this will happen in FY25."

The company said it expected a double-digit decline in wholesale revenues in the US, which accounts for around 50% of its business, leading to a reduction in overall earnings.

Restructuring plan and delisting for Superdry

Superdry PLC, another big fashion player, also saw its share price fall to 25%.

The restructuring plan, which aims to reduce losses and property-related liabilities, calls for Superdry to restructure its property portfolio and retail costs. The plan would involve rent reductions across 39 sites in the UK.

The group also intends to raise up to £10 million, all of which will be underwritten by CEO Julian Dunkerton. The ultimate aim is to take the case off the market. This news dashes shareholders' hopes of a rebound, given that the share price has already collapsed by over 80% this year.