Dr Martens stomped on to the stock market this morning with a £3.7 billion debut that values the business at more than ten times the amount its private equity owners paid six years ago, boosting hopes for the rush of listings that are waiting to follow.

The boot maker, which has been revered by punks and popstars as an anti-establishment fashion symbol, priced its shares at 370p each, at the top of its initial range after its initial public offering was eight times oversubscribed.

Permira, its private equity owner, sold 350 million shares in the stock market listing to raise £1.29 billion alongside other selling shareholders, which include 22 senior staff who will share awards more than £350 million. Kenny Wilson, 54, chief executive, is making about £58 million in the listing despite only joining in 2018 from Cath Kidston, which collapsed last year.

Mr Wilson said: “We have been delighted by the strong levels of interest, engagement and support from such a high-quality selection of institutional investors. The successful transformation of Dr Martens is a great story and what is even more exciting is the huge potential ahead.”

Shares in Dr Martens climbed when the market opened this morning before settling 51p, or 13.8 per cent, higher at 421p in mid-morning trading. Sources said that its boosted £4.2 billion market capitalisation values the business at roughly 18 times forward earnings. About 35 per cent of the business, or 1 billion shares, are now in public hands although shareholders are gearing up to sell another 53 million owing to the strong demand. It is understood that bankers brought forward the float from its expected listing date of Monday after having enough investor appetite to cover all the shares on offer within an hour of opening the order book.

Dr Martens refers to itself as a “global brand that has empowered rebellious self-expression” and has been worn by The Smiths, Sex Pistols, Nirvana and more recently Miley Cyrus and Beyoncé. The brand traces its roots to postwar Munich, where Dr Klaus Martens developed an air-cushioned rubber sole to support his broken foot after a skiing accident. Its classic eight-eyelet lace-up boot was developed in 1960 when the Griggs family of shoemakers, based in a village in Northamptonshire, bought the right and produced working men’s boots with yellow stitching.

The Griggs family, who kept a 10 per cent stake after selling to Permira, will be sitting on a £129 million windfall.

Since Permira bought Dr Martens for £300 million in 2014 from the Griggs family its sales have multiplied almost six-fold to £672 million. In the past two years it has increased the number of boots sold from 7 million to 11 million after investing in its supply chain to push growth overseas to 60 countries. Only one in ten shoes are still made in the UK and customers pay a premium of £189 for a pair of 1460s made in Northampton compared to a £149 pair manufactured overseas.

Dr Martens made £672.2 million sales in the year to March 31, 2020 and earnings before interest, tax, depreciation and amortisation of £184.5 million. The business has said that it expects earnings to grow in the “high teens” after growing earning before income tax, depreciation and amortisation to £86.3 million in the six months to September 30. Last year Permira bought Golden Goose, a luxury trainer brand, for £1.3 billion, about 15 times earnings. Dr Martens valuation ranks it ahead of Levis’ multiple but behind Canada Goose, maker of downfilled coats.

Investors are understood to be enthused about Dr Martens’ ambitions overseas and its resilience during the crisis and lockdowns, although the brand is a stark contrast to the queue of technology-focused flotations that are expected this quarter. Moonpig is targeting a £1.2 billion stock market listing based on its positioning as a technology greeting platform. The cybersecurity firm Darktrace, the takeaway app Deliveroo, the payments group Transferwise and Trustpilot, a ratings website, are all tipped for listings this year.

Source: The Times