Dr. Martens plans to go public on the London Stock Exchange as the legendary shoe and boot maker plans to expand its presence in the £ 341 billion global footwear market.
Known for its signature stomper boots worn by celebrities like top model Gigi Hadid and Hollywood actress Kristen Stewart, the British company could be worth around £ 3 billion ($ 4 billion), according to analysts.
The float, which would be one of the first major IPOs of the year, would go on more than seven years after Dr. Martens by the Griggs family for £ 300 million to Permira. The private equity group plans to sell its stake as part of the IPO.
"The announcement of our intention to float reflects the great accomplishments of the Dr. Martens team and the brand over the past seven years," said Kenny Wilson, chief executive of Dr. Martens. Martens. "More importantly, there is significant global growth potential for Dr. Martens in the future," he added.
Dr. Martens – known as "Docs" in the USA – was designed by Army doctor Klaus Märtens, who designed the air-cushioned sole to relieve his back pain. It first hit the UK retail market in the 1960s. The classic cherry-red leather eight-eyelet 1460 boot was originally aimed at workers who were on their feet all day but was soon adopted by youthful subcultures making an anti-fashion statement.
The brand rose to cult status after Pete Townshend, lead singer for rock band The Who, said he'd go to bed with two things on tour: "A cognac bottle and Dr. Martens boots." However, in 2003 it fell victim to changing fashion tastes and, under pressure of falling sales, stopped all production in the UK and relocated its factory to China and Thailand.
Today Dr. Martens produces more than 11 million pairs of shoes and boots in more than 60 countries every year. In the year up to March 2020, Dr. Martens had sales of £ 672 million (US $ 907 million) with earnings before interest, taxes, depreciation and amortization of £ 184 million.
Russ Mold, AJ Bell's investment director, said the IPO would likely attract the attention of investors in the UK and abroad, who are excited to see how the sales play out. “The boots may look good, but the real test for investors to part with their money is whether stocks can go the distance.
"While earnings growth numbers may be impressive, it doesn't look good if there are already holes elsewhere in the investment case," added Mold.
Since Permira took control of the company, it has invested in expanding its e-commerce offering, which has seen significant growth over the past 30 years%. of total sales in the nine months ended December 31, 2020.
“We invested heavily to make sure we deliver this
Best digital and store experiences to get in touch with our wearers
We are thus driving our long-term, sustainable growth, ”said the company.
Dr. However, Martens is still underrepresented in some key global markets, including the US and China, where it sold 12 and less than 1 pair of boots per 1,000 people, respectively, in 2020, compared to 31 pairs per 1,000 people in the UK.
Read: China's “unstoppable” global luxury market share is nearly doubling in the face of the pandemic
The message from Dr. Martens' planned IPO will raise hopes for a revival of the European IPO market, which lagged behind the record run of technology IPOs in the US last year. In December shares in the food delivery startup DoorDash
and Airbnb home rentals
rose up to 115% on the first day of trading in New York.
Read: IPOs in 2021: After a year of impressive pandemic offerings, these tech companies expect to keep going
Companies looking to list their shares in London were encouraged by the IPO of online health and beauty retailer The Hut Group last year
Stocks are up nearly 60% since their market debut.
Read: Hut Group shares rise more than 30% on London's largest tech IPO debut
IPOs include Moonpig, whose private equity owner Exponent Private Equity plans to make money amid the increased demand for digital greeting cards during the COVID-19 pandemic. The company could be worth around £ 1 billion, according to a report by Sky News.
Another company reportedly considering an IPO is grocery shipping company Deliveroo, which could target a valuation of £ 3.2 billion, according to analysts at Hargreaves Lansdown.
Dr. Martens has named Goldman Sachs
and Morgan Stanley
as joint global coordinators for the IPO and Barclays
Bank of America
and RBC Europe are joint bookrunners. Lazard is acting as the company's financial advisor.