Dr Martens has been urged to hire bankers and initiate an immediate strategic review by investor Marathon Partners Equity Management, as it pushes for a sale of the business.
The New York-based firm argues the footwear specialist’s stagnant profit growth and significant share price decline of 83% since its public listing in 2021 have disconnected its valuation from its true worth, according to a letter seen by Reuters.
The firm owns roughly 5m shares, making it one of the 30 largest investors in Dr Martens.
“Maintaining Dr Martens as an independent publicly traded company is likely no longer in the best interests of shareholders,” Mario Cibelli, Marathon Partners’ managing member, wrote to the company’s board last month.
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The letter, addressed to Dr Martens board chairman Paul Mason and dated 15 March, was seen by Reuters this week.
While the bootmaker holds a market value of approximately $1.1bn, it is a strong brand that could entice potential purchasers, potentially leading them to consider spending a minimum of $2bn to acquire the asset, said Cibelli.
In an interview with Reuters, he said he had spoken with management and board members on multiple occasions.
In his letter, Cibelli added he was concerned the business would have a “very difficult time earning its way to a share price that well exceeds what could reasonably expected to result from an auction process.”
A strategic buyer “could add further scale to operations, create new synergies and eliminate unnecessary overhead,” the letter added.
Cibelli also expressed support for CEO Kenny Wilson in the letter, describing him as “an open-minded and talented executive.”
Dr Martens was snapped up by private equity firm Permira in 2014 and in 2021 it was listed publicly again.
Permira still owns roughly 38.5% of the retailer and Cibelli argued the firm should “support a strategic alternative process to maximise shareholder value for a company that has effectively become stranded and orphaned in the public markets”.
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