Dr Martens shares fall as former owner sells part of its holding

By

Sandra Halliday

Published
Jan 7, 2022

Dr Martens shares continued their downward slide on Friday after Thursday had seen them plummeting from around £4.21 each to £3.80 as the firm’s biggest investor reduced its holding.

But the fall on Friday was less extreme with the shares down by just a couple of percent in early trading.

It came as private equity firm Permira sold millions of shares at £3.95 each. The stake sale raised £257 million but it didn’t mean that Permira has backed away from its involvement in the footwear specialist as it retains a 37% stake, having sold a 6.5% holding.

The 13% fall at one point on Thursday was the largest ever fall Dr Martens had witnessed during its almost-a-year on the stock market.

The sale makes sense for the private equity business that has controlled Dr Martens since 2014. Permira has profited handsomely from the company having originally paid £300 million to take control of it eight years ago. It had a 75% stake when the firm was listed last January and so already realised huge profits from the stake sold at the Dr Martens IPO. The buoyant shoe business has a current market capitalisation of £3.71 billion, making the former owner’s remaining 36% stake worth around £1.3 billion.

Analysts expect Permira to continue selling shares, although it hasn’t commented on this.

Relative newcomers to the stock exchange can see their share prices being extremely sensitive to big stake sales, although in the case of Dr Martens, it appears it’s not linked any lack of confidence in the company that has continued to turn in stellar results in recent periods.