In this year’s first quarter, Dr Martens’ profits went up by an impressive 70 percent thanks to the successful results of its vegan range of footwear.
Online sales also improved by around 66 percent to £72.7 million (roughly $87.7 million), which makes up 16 percent of the company’s total revenue.
Improvements of revenues as well as environmental impact
The popularity of the environmentally conscious footwear has increased substantially as the awareness of the environmental effects of animal agriculture continue to grow. Sales of the vegan range have risen by several hundred percent in the last few years according to CEO Kenny Wilson. The leather in the boots have been substituted with a synthetic polyurethane plastic, and currently they account for about 4 percent of the company’s sales.
Improved margins on such products resulted in fundamental earnings rising by 70 percent to £85 million ($102.6 million). The rapid expansion arrives as Wilson evaluates possibilities to cash in the company’s investments. Around six years ago, Permira acquired Dr Martens in a £300 million deal, but the private equity investor has recently been aiming towards a possible sale or stock market flotation.
According to Wilson, action from Permira may be coming soon.
“They are starting to look ahead to when they are going to sell the business,” said Wilson.
Permira, which has locations all over Europe, holds over €40 billion of unspent and uninvested capital according to their website. Its typical holding period for an investment is around five to seven years, and it has now owned Dr Martens for five and a half years. Dr Martens has nearly tripled its earnings in that period, from £160.4 million in 2013 to £454.4 million as of the 31st of March 2019.
Dr Martens has been trying to focus more on improving product sales direct to consumers instead of paying a significant portion of the sticker price to third-party retailers.