It is reported that the US private equity giant Carlyle Group is considering the acquisition of British shoe brand Dr. Martens (Dr. Martin), which valued the latter at more than 1 billion pounds. Dr. Martens is currently owned by European private equity fund Permira.
Although none of the parties concerned confirmed the news, people familiar with the matter told Bloomberg News that the Carlyle Group must be paying attention to Dr. Martens, but it is still in its early stages. This means that the Carlyle Group has not made a final decision or made a specific offer to Dr. Martens, and other potential bidders may appear.
Dr. Martens was founded in 1960 and is known for its brand positioning in rubber-soled shoes and counterculture. The brand was previously controlled by the Griggs family, headquartered in Northamptonshire. Permira bought Dr. Martens 5 years ago for £ 300 million. (See Gorgeous: Permira acquires Dr. Martens from the UK)
Dr. Martens is a rather unique brand that can leverage its traditional positioning while keeping up with the trends. Permira has provided significant support to the brand in expanding its physical store and online businesses, helping it to significantly improve its performance. In the 12 months ended March 31, 2019, benefiting from a 42% increase in direct sales, including e-commerce, Dr. Martens’s full fiscal year sales increased 30% year-on-year to 454 million pounds. EBITDA ( Earnings before interest, taxes, depreciation and amortization) increased by 70% to 85 million pounds. The brand also added 20 new stores during the period, driving the total number of stores to 109.
E-commerce channels contributed 67% of direct sales, and the expansion of specialty stores boosted direct business profits to 199 million pounds. Recently, Dr. Martens has aimed at the “vegan” trend, and vegan boots currently account for 4% of its total sales.
Earlier reports said that Permira plans to withdraw its investment in Dr. Martens next year, and is currently working with Goldman Sachs and Robert W Baird to plan to sell or list Dr. Martens in the United States. And Permira gave a valuation of up to 1.2 billion pounds-about 14 times the brand’s EBITDA (earnings before interest, tax, depreciation and amortization). (For details, see “Gorgeous Chi”: private equity fund Permira wants to sell “Martin boots” Dr. Martens brand, valuation may be up to 1.2 billion pounds)
The Carlyle Group itself may also be looking for a new challenge, they want to invest in a brand that is large and has the potential to become larger. Golden Goose Deluxe Brand (Chinese translation: “Golden Goose”, hereinafter referred to as “Golden Goose”) is one of the precedents. The Carlyle Group acquired this rapidly expanding high-end brand in 2017. (For details, please refer to “Gorgeous Chi”: The Carlyle Group confirms the acquisition of the entire equity of Italian luxury luxury shoe brand Golden Goose)
In September, sources said the Carlyle Group plans to sell cheap golden goose to take full advantage of its current valuation. It is reported that Golden Goose’s bidding process is expected to begin between the end of this year and the beginning of next year. (For details, see Gorgeous: Valuation is over 1 billion Euros. Italian luxury luxury shoe brand Golden Goose will launch a new round of capital operation.) When the Carlyle Group initially invested in Golden Goose, its annual sales were about 100 million Euros. It is estimated that its sales have increased to about 260 million euros in the last fiscal year, and its profits are growing rapidly. Golden Goose’s current valuation may be around € 1 billion.