Dr Martens – from a humble work boot to an iconic fashion statement, this group’s shares are now at 66p compared to a brokers TP of 102p

03.03.2025

I admit it right now; I am not a fashion geek!

So, you will never in a month of Sundays find me wearing a pair of 1460’s.

Now that I have got that out of the way – I reckon that Dr Martens looks right – the shares, not the boots!

The Business

The £637m-capitalised Dr. Martens (LON:DOCS) is an iconic British footwear brand which was founded in Wollaston, in Northamptonshire in 1960.

The first boot was born on 1st April 1960 and was accordingly called the ‘1460’.

The brand's popularity grew after Pete Townshend of The Who wore the boots as a symbol of his working-class pride.

For the six and a half decades since, Dr. Martens has transcended youth and subcultures demonstrating its unrivalled appeal and ability to underpin trends.

The eight-holed 1460 boot, with its iconic and instantly recognisable design characteristics - namely the yellow welt stitch, grooved sole and black and yellow heel loop - still provides the foundation for all other product expressions and represents over 40% of sales.

The brand remains as relevant now as ever before.

It is still being adopted by those looking to express their individual style and attitude and who appreciate uncompromising quality and durability.

Dr. Martens started out as a humble work boot but was quickly adopted by youth cultures as a symbol of their individual self-expression and rebellious spirit.

Produced originally for workers looking for tough, durable boots, the brand was quickly adopted by diverse youth subcultures and associated musical movements.

Wearers continue to adopt the brand to express their unique style and alternative spirit but do so through a modern lens.

Having floated in late January 2021, the group today is a FTSE 250 Index constituent.

It designs, develops, procures, markets, sells and distributes footwear, under the Dr. Martens brand.

Its design studio is situated in Camden Town in London.

Its product categories include Originals, Fusion, Kids, Casual and Accessories.

The Originals category comprises boots, shoes and loafers and also included within the Originals category is the Made in England range.

The Fusion category comprises platform boots and shoes, sandals, heels, and refined take downs of the Originals.

Within the Kids category is the mini-me range, which includes Originals, Fusion, and Casual collections.

It offers various accessories, such as shoe care, laces and socks, leather bags and small leather items.

The group operates in over 60 countries globally, through a range of modes: directly operated stores and ecommerce sites, wholesale partners and distributors.

Interim Management Comment

Former CEO Kenny Wilson, in late November 2024, stated that:

"Our first half performance was in line with expectations and we remain confident in our ability to deliver on our plans and the targets we set for FY25.

As we shared in May, this is a year of transition and we have made good progress with our four main objectives: pivot our marketing to a relentless focus on our product, turn around our USA DTC performance, reduce our operating cost base and strengthen the balance sheet.

Our new marketing campaigns are showing encouraging early signs, with strong sales of new product, giving us confidence that we will return USA DTC to positive growth in the second half.

We took swift action to implement cost savings and now anticipate the benefit of this in FY26 to be at the top of the previous guidance range of £20-£25m, alongside an ongoing focus on tight cost control throughout the business.

We have delivered a significant reduction in both inventory and net debt, together with successfully refinancing our debt facilities.

The early success of our new product ranges provides a strong foundation as we enter the important peak trading period.”

Q3 Statement – 27th January

New CEO Ije Nwokorie stated that:

"I am excited to be CEO of Dr. Martens.

The global relevance of our iconic brand, the strength of our product line and the passionate commitment of our team give me great confidence for FY25 and beyond.

Our Q3 trading was as expected and our outlook for FY25 remains unchanged.

We have made good progress against our objective of turning around our USA performance, with USA DTC in positive growth in Q3.

We continue to actively manage our costs and are on track to meet our inventory reduction target for FY25.

The team and I are squarely focused on returning the business to sustainable and profitable growth."

The Equity

There are some 965m shares in issue, approximately 91% of which are held by Investment Professionals.

The larger holders include Permira Advisers (38.36%), Artemis Investment Management (9.02%), HSBC Private Bank (5.82%), BlackRock Investment Management (5.09%), Royal London Asset Management (3.94%), Fidelity Management & Research (3.27%), GIC Investment Management (2.98%), Franklin Mutual Advisers (2.28%), The Vanguard Group (2.27%), and Legal & General Investment Management (1.49%).

Analyst Views

There are nine analysts following the company, the majority of whom are calling the shares as a Buy.

The consensus average Target Price is 78p, the highest being 102p, while the lowest call is for just 65p.

In a recently issued note, analyst Anne Critchlow, at Berenberg, stated that Dr Martens has global relevance.

She noted that the group’s shares may have taken a kicking in recent years but reckoned that the iconic brand retains ‘global appeal and growth potential’.

In initiating her coverage of the group, she came out with a ‘Buy’ recommendation and a Target Price of 102p on the bootmaker, stating that:

“Dr Martens is a distinctive footwear brand with global relevance that stretches far beyond its workwear and counter-cultural roots in the UK.

We estimate that slightly less than 18% of Dr Martens’ total revenues are generated in the UK, where it has a 1% share of the total footwear market.

On a global basis, we estimate that Dr Martens has only a 0.0003% market share and we think there is clear scope to build its presence further worldwide.

The company is continuing to expand its stores around the world and create more wholesale partnerships, while large countries and regions such as India, South Africa and the Middle East represent virgin territory for the company.”

In My View

Dr. Martens are worn by people around the world who use them as a symbol of empowerment and as a statement of their own individual attitude.

Now I would like to think that investors will wear some in their portfolios.

The shares, having fallen some 35% over the last year, are standing at 66p this morning.

Taking a view from the analysts, suggests that there is some decent upside for those who buy today.

The next piece of corporate news should be out in the middle of next month.