Shoe maker Dr. Martens launches $ 4 billion IPO plan
Dr Martens is planning an initial public offering on the London Stock Exchange, as the famous shoe and boot maker seeks to expand its presence in the Â£ 341 billion global footwear market.
The British company, known for its iconic boots worn by celebrities including supermodel Gigi Hadid and Hollywood actress Kristen Stewart, could be valued at around Â£ 3 billion ($ 4 billion), analysts said.
The float, which would be one of the first major IPOs of the year, would come more than seven years after the Griggs family sold Dr. Martens for Â£ 300million in Permira. The private equity group plans to sell its stake as part of the IPO.
âOur announcement of our intention to float reflects the great achievements of the Dr. Martens team and brand over the past seven years,â said Kenny Wilson, CEO of Dr. Martens. âEven more important is the significant global growth potential for Dr Martens in the future, âhe added.
Created by military medic Klaus MÃ¤rtens, who designed the air-cushioned sole to help relieve his back pain, Dr. Martens – known as “Docs” in the United States – made an appearance on the UK retail market in the 1960s. The classic 1460 eight-eyelet boot in cherry red leather was initially intended for workers who spent all day on their feet, but it was quickly adopted by youthful subcultures making an anti-fashion statement.
The brand was elevated to cult status after Pete Townshend, frontman of rock band The Who, said he would go to bed on tour with two things: “A bottle of brandy and a Dr. Martens boot.” But in 2003, she fell victim to changing fashion tastes and, under pressure from falling sales, shut down all production in the UK and moved her factory to China and Thailand.
Today, Dr. Martens sells over 11 million pairs of shoes and boots each year in over 60 countries. In the year to March 2020, Dr. Martens generated revenue of Â£ 672 million ($ 907 million), with earnings before interest, taxes, depreciation and amortization of Â£ 184 million. pound sterling.
AJ Bell’s chief investment officer Russ Mold said the IPO would likely grab the attention of investors in the UK and overseas keen to see how sales go. âHis boots may look good, but the real test for investors to part with their money is whether stocks can go the distance.
âWhile the earnings growth figures may be impressive, it doesn’t look good when there are already holes elsewhere in the investment case,â added Mold.
Since taking control of the company, Permira has invested in expanding its e-commerce offering, which has been one of the main contributors to substantial growth in recent years, accounting for 30% of total revenue over the nine months to December 31, 2020.
âWe have invested heavily in ensuring that we provide the best digital and in-store experiences to connect with our users, and through that, we are driving our long-term sustainable growth,â the company said.
However, Dr Martens is still under-represented in some key global markets, notably the United States and China, where he sold 12 and less than 1 pairs of boots per 1,000 respectively in 2020, up from 31 pairs to 1. 000 inhabitants in the United Kingdom.
News of Dr. Martens’ planned IPO will raise hopes of a recovery in the European IPO market, which has lagged behind the record series of technology IPOs in the United States. United last year. In December, actions in the food delivery startup DoorDash DASH,
and the house rental company Airbnb ABNB,
climbed to 115% on their first day of trading in New York.
Companies looking to list their shares in London were encouraged by last year’s IPO of online health and beauty retailer The Hut Group THG,
which has seen its share increase by almost 60% since its inception in the market.
Those considering IPOs understand Moon pig, whose private equity owner Exponent Private Equity is looking to cash in on increased demand for digital greeting cards during the COVID-19 pandemic. The company could be valued at around Â£ 1 billion, according to a report by Sky News.
Another company is rumored to be considering an IPO is a food delivery company Deliveroo, which Hargreaves Lansdown analysts say could aim for a valuation of Â£ 3.2bn.
Dr Martens appointed Goldman Sachs GS,
and Morgan Stanley MS,
as joint global coordinators of the IPO and Barclays BCS,
Bank of America BAC,
and RBC Europe are associate bookkeepers. Lazard acts as the company’s financial advisor.