Dr. Martens profits up 70% thanks to the success of the new vegan line
Profits at Dr Martens surged by 70% in the year to the end of March, boosted by the success of designs such as its “vegan” range of boots.
Online sales also rose by two-thirds to £72.7m, accounting for 16% of total revenues for the company, which is expanding to international markets.
Sales of the vegan range – which replaces the leather upper with synthetic polyurethane plastic – have increased by “multiple hundreds of percent” in recent years, according to its chief executive, Kenny Wilson. Vegan boots now account for 4% of the shoemaker’s sales, amid increasing awareness of the environmental impact of livestock among consumers.
Other successful products included departures from the original Dr Marten boots such as sandals, collaborations with the Sex Pistols and designer Marc Jacobs, and versions for children.
Increased margins on the products meant underlying earnings – without taking into account spending on expansion to new markets – rose by 70% year-on-year to £85m, the company said on Monday.
The fast growth comes as the shoemaker’s owner considers options to cash in its investment. Permira bought Dr Martens in 2013 in a £300m deal, but the private equity investor is now looking at a possible sale or stock market flotation to realise its profits.
Wilson, the former Cath Kidston and Levi’s executive who was hired last year, said a decision from Permira “could be coming over the horizon”.
“They are starting to look ahead to when they are going to sell the business,” he said.
Permira, which has offices across Europe, has more than €40bn (£37.2bn) of capital that it has either spent or is currently investing, according to its website. Its standard holding period for investments is five to seven years; it has owned Dr Martens for five and a half years.
During that time Dr Martens has almost tripled its revenues, from £160.4m in the 2012-13 financial year to £454.4m in the year to 31 March 2019.
Dr Martens has been pushing to increase its sales of items direct to consumers, rather than paying a large chunk of the sticker price to third-party retailers. Direct-to-consumer revenues rose by 42% year-on-year to just shy of £200m, accounting for 44% of sales.
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Wilson said the company was “empowering rebellious self-expression” for the millions of customers who bought 8.3m pairs of shoes over the year.
Dr Martens were first manufactured in Wollaston, Northamptonshire, in 1960, after R Griggs Group bought the design from the eponymous German inventor. The boots became part of the standard outfit for skinheads, punks and goths, but have in recent years been adopted by pop and film stars such as Pharrell Williams, Rita Ora and Julia Roberts.
Dr Martens had 109 of its own stores at the end of March, including two new locations in the UK and four new shops in the US.