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Soled? Permira kicks Dr Martens into play with potential £1.2 billion sale

Cult boot-maker could try on a new owner for size Read More...

Dr Martens could be trying on a new owner for size.

The British company—known for its signature stomping boots worn by celebrities including top model Gigi Hadid and Hollywood actress Kristen Stewart—is being shopped around the market in a deal which could be valued at up to £1.2 billion.

If that sale price is achieved, it would represent a healthy return for Permira, the UK-based private-equity firm which bought Dr. Marten’s in 2013 for £300 million.

Kenny Wilson, chief executive of Dr Martens said in August that Permira wanted to exit its investment in 2020.

Potential buyers include rival buyout group Carlyle Group, according to a report by Bloomberg. Private-equity firms have increasingly been selling their portfolio companies to each other as they look to cash in on their investments at a time when investors are shunning initial public offerings.

Private equity firms have sold 18 U.K. businesses to rivals, in deals worth a total of $4.3bn in the first eight months of the year, according to financial data provider Dealogic

Profits at Dr Martens increased by 70% for the year ending March 2019, thanks to the success of its “vegan” range of boots which now account for about 4% of total sales.

Online sales also increased during the period to 67%, representing around 16% of the group’s total revenue. The company, which is expanding into international markets, opened 20 new stores last year, including four in the U.S. (in New York and L.A.), bringing its total to 109.

Created by army doctor Klaus Martens who designed the air-cushioned sole to help relieve his back pain, Dr Martens — known as ‘Docs’ in the U.S. — first hit the British high street in the 1960s. The classic 1460 eight-eyelet boot in cherry red leather was initially aimed at workers who spent all day on their feet, but they were soon adopted by youth subcultures making an anti-fashion statement.

The brand was elevated to cult status after Pete Townshend, lead singer of rock band The Who, said he would go to bed on tour with two things: “A cognac bottle and Dr Martens boot.”

In 2003, the brand fell victim to changing fashion tastes and, under pressure from falling sales, stopped all production in the U.K. and moved its factory to China and Thailand.

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