Fashion’s fall hopes for dealmaking seem to have slipped off the silhouette and to the shoe.
Sources said Dr. Martens — which is known for its thick-soled boots with the yellow stitching made infamous by London “punks” in the Seventies — is out in the market looking for buyers and asking for a pretty penny.
One financial player said the company’s owner, Permira, was looking for a “ridiculously high” valuation on the order of 1.2 billion pounds, or $1.5 billion. That would be just over 14-times the company’s earnings before interest, taxes, depreciation and amortization, which totaled 85 million pounds last year.
Permira, which bought Dr. Marten in a 300 million pound deal in 2014, has some competition as it courts would-be shoe buyers.
The Apax-owned Cole Haan is also said to be on the market. Cole Haan indicated in August that it was preparing for an initial public offering and one source said that is where the company is putting its efforts and that the official filing could come shortly. Companies often leave open the possibility of a sale while they also move toward an IPO since such a “dual-track process” can help nudge buyers by providing another exit for the investor.
Cole Haan declined to comment.
A representatives for Permira did not return a request for comment.
The shoe companies are coming to market at a time when significant fashion deals are still few and far between, with strategic acquirers largely honing their strategies and private equity companies staying on the sidelines.
But if the price is right — and that’s always a big question — there’s always a market for a growth brand and Dr. Marten has been picking up momentum.
Permira said in August that the company’s revenues grew 30 percent last year to 454.4 million pounds with EBITDA up 70 percent. Direct-to-consumer revenues increased 42 percent to 199.4 million pounds, with a 67 percent in the brand’s e-commerce business.
Kenny Wilson, who has been chief executive officer of Dr. Martens for a year, said: “With our relentless focus on the consumer and a mind-set of continuous investment, we are committed to growing the brand for the long term while staying true to our purpose of empowering rebellious self-expression. By putting consumers first, accelerating our DTC expansion and improving our operational performance we have delivered double-digit revenue growth in all of our key markets and strong EBITDA performance.”
Dr. Martens opened 20 new stores last year, bringing its fleet to 109.
The brand is looking to keep up its momentum by staying with its sweet spot and then expanding from there.
“Our product strategy is to grow our Originals business while simultaneously building the consumer’s understanding of our product range outside the Originals range,” the company said. “Originals, driven by our core icon silhouettes, grew by 28 percent during the year while the Fusion category, our secondary focus, grew by 84 percent powered by a growing sandals business and our quad platform product. Going forward Originals and Fusion will continue to be our most important categories with our kids business growing through ‘mini-me’ versions of our Icons.”
The British brand was founded in 1960 in Northamptonshire and was originally intended for workers looking for tough boots. But the name quickly found a place in the broader culture — and counter-culture — and over the years has survived the ebbs and flows of style to become an icon of fashion. Once family-owned, the brand has expanded beyond its core boot and shoe styles into accessories and even apparel and is now sold in 58 countries.
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