Dr. Martens Jumps in London Debut on Boots’ Enduring Appeal

British bootmaker Dr. Martens Plc soared in London trading after owner Permira Holdings and other shareholders raised 1.3 billion pounds ($1.8 billion) in an initial public offering, cashing in on the lasting popularity of its cult footwear.

The stock surged 22% to close at 450 pence on Friday after pricing its IPO at 370 pence, the top end of an initial range. It’s the U.K.’s largest domestic IPO since September.

The footwear got its start in the ruins of postwar Germany. Later marketed in Britain, its boots were priced at two pounds apiece, with its eight-hole workmen’s model becoming a seminal piece of footwear for Britain’s rebellious youth in the following decades. The Who’s Pete Townshend wore the boots, which later were adopted in glam and punk circles.

Dr. Martens Jumps in London Debut on Boots’ Enduring Appeal

Designed with an air-cushion sole and known as “Doc Martens” to fans, the brand remains a global fashion statement recognizable by both Boomers and Millennials. The company now is benefiting from a pandemic-induced surge in online shopping.

“It’s quite rare for an iconic brand to float,” said Oliver Brown, a fund manager at RC Brown, which participated in the offering. “Dr. Martens is attractive to investors because it has a loyal customer base, high margins and holds a lot of growth potential by expanding its store presence and making inroads in markets such as North American and China,” he said.

Dr. Martens is one of several retailers to tap European public markets over the past few months. It is the largest IPO in London by a U.K. company since online shopping emporium THG Plc, which operates sites selling everything from skincare and beauty products to protein powder, in September, according to data compiled by Bloomberg.

The coronavirus pandemic and ensuing lockdown orders have choked brick-and-mortar stores, pushing consumers toward online shops during the past year. Still, Dr. Martens sales rose 18% to 318.2 million pounds in the six months ended Sept. 30, while gross profit increased 20%. The retailer gets about 20% of its sales from e-commerce, up from just 7% in 2015.

Others taking advantage of the pandemic-fueled online shopping boom include Poland’s InPost SA, which operates automated parcel lockers for online deliveries and soared in its Amsterdam trading debut Wednesday, while virtual greeting-card company Moonpig Group Plc and used-car platform Auto1 Group SE are taking investor orders for public offerings.

“There may be potential bubbles in parts of the market but that doesn’t apply to good, strong consumer brands and high-quality IPOs, which continue to be in short supply,” Brown said.

Another Six Decades

Dr. Martens is named after German doctor Klaus Martens, who teamed up with mechanical engineer Herbert Funk in the 1940s to begin producing shoes from disused military supplies. The company has had bumps in the road, as it nearly went bankrupt in 2003 and moved production to China at the cost of jobs in the U.K.

The IPO valued at Dr. Martens at 3.7 billion pounds, which is more than 10 times the 300 million pounds owner Permira Holdings paid for the bootmaker in 2014. The offering comprised 350 million existing shares, according to a statement Friday, all sold by investors, with no proceeds going to the company.

The Griggs family, which sold Dr. Martens to Permira, along with employees and directors of the company, also held shares in the company before the IPO. About 35% of the company’s shares are available for trading. Shareholders can sell another 53 million shares if there’s enough demand, which would increase the size of the offering to 1.49 billion pounds.

Permira will retain a majority stake of 42.9% post listing, assuming the over-allotment option is exercised in full.

The company had secured cornerstone investments of 250 million pounds from BlackRock Inc., 100 million pounds from Janus Henderson Group Plc and 75 million pounds from Merian Global Investors.

The deal gathered enough investor interest to cover all the shares on offer within about an hour of opening its order book. Dr. Martens accelerated the IPO timeline, closing its offering two days earlier than originally planned.

Goldman Sachs Group Inc. and Morgan Stanley are joint global coordinators, while Barclays Plc, BofA Securities, HSBC Holdings Plc and Royal Bank of Canada are joint bookrunners. Lazard & Co. is the company’s financial adviser.

©2021 Bloomberg L.P.

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