A member of Marathon Partners, one of the 30 largest investors in Dr. Martens with approximately 5 million shares, is calling for a strategic review of the footwear and apparel brand.

Marathon Partners’ managing member Mario Cibelli has advised Dr. Martens to hire a financial advisor and consider alternatives for the business with the aim of “maximising shareholder value”.

This may include, but is not limited to, a sale or merger of Dr. Martens to other interested parties.

GlobalData retail analyst Alice Price told Just Style exclusively that the investor has suggested the British footwear brand would fare better as a “private company” or as part of a multi-brand holding company.

Price pointed out that the calls for a strategic review of Dr. Martens by one of its biggest investors come as the company’s share price has fallen drastically since its stock market debut in 2021.

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However, she also noted that, despite the falling shares, Dr. Martens market value remains high as its iconic footwear styles “continue to stand the test of time”. This, Price believes, makes Dr. Martens an “attractive investment” for any potential buyers.

Investor suggestions for Dr. Martens

Marathon Partners’ Cibelli wrote a letter to the chairman of Dr. Marten’s Board of Directors Paul Mason, stating: “Maintaining Dr. Martens as an independent publicly traded company is likely no longer in the best interests of shareholders.”

In the letter, seen by Just Style, Cibelli also argued that, while Dr. Martens has proven to be a successful investment for Permira since its 2014 acquisition, unfortunately its public shareholders have not fared well.

He explained: “Since the initial public offering in 2021, Dr. Martens’ shares have lost approximately 75% of their value as the company’s earnings growth has stalled, intermediate term projections have fallen short, and smaller public companies have generally fallen out of favour with investors in both the US and UK.”

This, Cibelli believes, has led to a situation where the valuation of Dr. Martens shares by public markets has become “far detached from their underlying intrinsic value”.

Additionally, Cibelli highlighted that as a private company, or operating as part of larger, multi-brand holding company, Dr. Martens could produce higher earnings and “could add further scale to operations, create new synergies and eliminate unnecessary overhead”.

He underscored the brands’ heritage and long-standing relevance to consumers, noting that a private auction process would likely attract several interested parties and reward shareholders with a significant premium above current prices.

However, at the same time, Cibelli cautioned Dr. Martens’ directors to remain “vigilant” against potential conflicts of interest stemming from their private equity sponsor’s involvement in the sale or initial public offering of Permira’s Italian footwear brand Golden Goose.

Marathon Partners had not responded to Just Style’s request for a comment at the time of going to press.

A spokesperson from Dr. Martens confirmed to Just Style that Marathon Partners had sent a letter to the British bootmaker but declined to share any other comments.

In June 2023, Dr. Martens smashed its full year 2023 results, achieving what it described a “milestone” revenue of £1bn ($1.24bn), however profits were down by almost a third (29%).