Dr Martens owner seeks at least £1bn to sell the brand

By

Sandra Halliday

Published
Dec 2, 2019

Rumours that Dr Martens could fetch as much as £1 billion appear to be on the ball, and even a possible underestimation. The shoe firm’s private equity owners are reportedly seeking at least that figure to sell the expanding company, even in the current weak economic environment.

The Sunday Tines reported that owner Permira has told potential bidders that the company should be able to double its underlying earnings in the current 12 months (the period to next March), an acceleration on the already-impressive 70% growth it saw a year earlier.

The price tag would certainly represent a premium for Permira, which bought the company for £300 million three years ago. It has since set about expanding its stores and boosting the brand digitally, as well as last year appointing ex-Cath Kidston chief Kenny Wilson as CEO.

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While the newspaper said the expected price was a surprise given that “many private equity firms [are] looking to cut exposure to consumer-facing companies,” that view ignores the continuing appeal of the most successful consumer-facing companies. 

Dr Martens has been able to leverage its heritage and combine it with an on-trend approach to hit a consumer sweet spot that makes the brand both aspirational for mainstream shoppers and also one that higher-spending shoppers are happy to trade down to. It has also successfully moved beyond its original youth market to appeal to wider age ranges.

Its direct-to-consumer focus with more of its own stores and more revenue coming through its webstore helped sales rise 30% last year to £454.4 million and the fact that profits are rising even faster than that shows that the company isn’t having to resort to markdowns to shift its products.

As we reported last month, American buyout firm Carlyle is mulling a Dr Martens bid and is reportedly a front-runner to acquire the business.