Dr. Martens confirms London IPO

With A Track Record Of Impressive Growth, Dr. Martens Looks To Join The London Stock Exchange

Airwair International Limited, Dr. Martens’ parent company, has announced they will go ahead with their plans to IPO on the London Stock Exchange. The announcement comes on the heals of the firms holding company, Permira, selling a stake that adds up to about 25% of the company’s value.

No valuation for Dr. Martens has been made public and the float plan isn’t 100% yet because the company is “considering applying for admission of its ordinary shares to the premium listing segment of the Official List of the FCA and to trading on the main market of the London Stock Exchange.” It is worth noting that the company is pursuing the LSE and not its little brother the Alternative Investment Market which is bogged down by fewer regulations and tends to be more appealing to relatively small fashion companies.

Despite the sheepishness from the British footwear company, they seem resolute in perusing a path to going public so long as there is no major crisis, and in a time like this, if the company hasn’t been impeded by crisis yet, they likely will not be now.

The announcement of our intention to float reflects the great achievements of the Dr Martens team and brand. Even more important is the significant global growth potential for Dr Martens in the future. Our iconic brand appeals to a diverse range of consumers around the world who wear our footwear to express their individual style. We have invested massively to ensure that we deliver the best digital and store experiences to connect with our wearers, and through this we are driving our long-term, sustainable growth.

Kenny Wilson, CEO of Airwair Intl Limited

Any IPO invites an important question for investors: what does this firm have to offer? Why would I “buy-in?” For Dr. Martens, the answer is clear. All of the recent data on the company’s finances show that investors can expect rapid and resolute growth.

Dr. Martens | Photo by Gavin Watson circa 1979

The company reported that 11 million pairs of shoes and boots are sold annually and that these sales are taking place in more than 60 countries. These sales yielded revenue of £672 million in the year 2020 and an EBITDA (a well-respected indicator of cash-flow) of £184.5 million, which amounts to an EBITDA margin of 27.4%.

Like all companies, the pandemic did create some challenges but as said before, it was no crisis! During the tumult, the firm continued the growth that has defined their finances for several years. Take the time between FY18 to FY20 for example the group brought in revenue compound annual growth (CAGR) of 39% and an EBITDA CAGR of 81%. While CAGR is only a figurative representation of growth, it is a good indicator of trends, and 39% CAGR outperforms the (about) 7% CAGR yielded by the entire NYSE during that period.

This staggering growth can be attributed in part to Dr. Martens’s direct-to-consumer business model. The D2C strategy “allows for more direct touchpoints with consumers, a better showcase of the footwear and the brand, access to more data, and more controlled and strategic management of the brand,” said the brand on Monday. Moreover, Dr. Martens’s online D2C sales performance during the last, pandemic-filled year should breed optimism for prospective investors.

From March 2019 to March 2020, D2C accounted for 45% of total revenue with physical stores making up 25% and online retail making up 20%. But in H1 of FY21, online sales understandably took over, and of the 34% of revenue created by D2C sales, online sales accounted for 24% and physical stores only 11% due to enforced closures and the choice of people to stay indoors.

Note, however, that these statistics demonstrate that Dr. Martens has an established wholesale business model that has consistently accounted for more than 50% of its sales.

Today marks an important milestone for Dr. Martens and is testament to the skill and hard work of our management team, as we build the business to match the scale and potential of our brand. We have made significant investment in the business over the last few years to strengthen the team, our operations and position ourselves for the next exciting stage of development, as a publicly listed company.

Paul Mason, Non-Exec Chairman of Airwair Intl Limited

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