Dr Martens investor calls for strategic review

In a letter seen by Reuters, the New York-based investment firm said the “stalled earnings growth and sharp share price drop” of 83% since its public listing in 2021 have “decoupled its valuation from its intrinsic value”.

Addressed to Dr Martens chair Paul Mason on March 15, Marathon Partners’ managing member Mario Cibelli wrote: “Maintaining Dr. Martens as an independent publicly traded company is likely no longer in the best interests of shareholders.”

Cibelli added that the retailer’s strong brand could make it attractive to buyers who might be willing to pay at least $2bn (£1.59bn) to acquire the asset, exceeding its current market value of around $1.1bn (£870m).

Cibelli also said in the letter that he worried the company would have a “very difficult time earning its way to a share price that well exceeds what could reasonably be expected to result from an auction process” and that a strategic buyer “could add further scale to operations, create new synergies and eliminate unnecessary overheads”.

The letter also said that Dr Martens would likely produce higher earnings as a private company or as part of a larger, multi-brand holding company rather than being a public company.

Cibelli suggested that Dr Martens owner Permira should “support a strategic alternative process to maximise shareholder value for a company that has effectively become stranded and orphaned in the public markets”.

Reuters reported that Cibelli showed support for chief executive Kenny Wilson, calling him an “open-minded and talented executive”.

Marathon Partners Equity Management is one of Dr Martens’ largest investors and currently owns around five million shares in the business.

Dr Martens was bought by private equity firm Permira in 2014, before being listed publicly again in 2021; the business still owns 38.5% of Dr Martens to date.

Neither Dr Martens nor Permira responded to requests for comments.