Report: Activist Investor Buys Significant Stake in Dr Martens, Looks to Turn Business Around
Shares of Dr Martens got a lift on the news.
An activist investor has reportedly acquired a significant stake in Dr Martens as it looks to revitalize challenged business for the British boot maker.
According to a Saturday report in Sky News, activist fund manager Sparta Capital has acquired “stock worth tens of millions of pounds” in Dr Martens, and is currently working with the brand’s board to help it improve its business. The report added that Sparta is now one of the footwear brand’s top 10 shareholders.
Dr Martens stock rose on the news, and was up more than 4 percent in London trading on Monday.
A Dr Martens spokesperson did not confirm the Sky News report, but said in a statement: “We engage with all our shareholders on a frequent basis and met with Sparta as part of the regular roadshow after our full-year results.”
FN has reached out to Sparta Capital for a comment.
At the time of its IPO in 2021, Dr Martens’ listing price was 370 pence a share. The offering comprised 350 million existing shares and valued the boot maker at 3.7 billion pounds. This was more than 10 times what parent Permira Holdings paid back in 2014 to own the brand.
Since then, the footwear brand’s value has dropped as it has faced troubles in the U.S. market. CEO Kenny Wilson said in a statement in June that the company “poorly implemented” the move of its main west coast distribution center from Portland, Ore. to Los Angeles, Calif., which affected fourth-quarter wholesale shipments against the backdrop of a challenging consumer environment.
This month, the company said it plans to focus attention on growing its business in the Americas as its top priority for fiscal year 2024 after revenues in this region dropped compared to the prior year, due to wholesale challenges, according to a regulatory filing.
In June, the company said that it had reached 1 billion British pounds ($1.25 billion, based on exchange at the time) in annual revenue for the first time when reporting earnings for fiscal 2023. Revenue grew 10 percent in fiscal year 2023 to 1 billion pounds ($1.25 billion), up from 908.3 million pounds ($1.1 billion) in 2022. Dr. Martens noted that it sold 13.8 million pairs of shoes in the year, down 2 percent on the previous year.