Dr Martens CEO Kenny Wilson talks to Drapers about taking the famous footwear brand international – and rumours of a potential sale
“I got my first pair of Docs when I was 13,” recalls Kenny Wilson, CEO of Dr Martens, over a cup of tea at the footwear brand’s Camden headquarters. “I remember growing up in Aberdeen and seeing Terry Hall from The Specials wearing them, so I went with my parents to buy my first pair of black 1460 boots.”
It was to be the start of a long connection with the famous footwear label, often affectionately nicknamed Docs or DMs. On the day Drapers meets the amiable Scotsman, he is wearing a pair of black Dr Martens’ boots he proudly claims to have had for over two decades.
The combination of the air-cushioned sole and the robust leather upper has proved to be timeless
Penny Graham, clerk at footwear organisation the Worshipful Company of Cordwainers
Wilson took the reins of the bootmaker in July last year from his previous role as the chief executive of another quintessentially British brand, Cath Kidston. Former colleagues chuckled that the job was a perfect fit for Wilson when they heard the news of his appointment because of his large collection of DMs. He now has 24 pairs.
Long a symbol of youthful rebellion, Dr Martens have been donned by everyone from The Who’s Pete Townshend to model Kendall Jenner.
Born in the 1960s
The brand’s story started in 1960, when the Griggs, a family of Northamptonshire shoemakers, spotted an advert for an innovative air-cushioned sole that had been invented by German doctors Klaus Maertens and Herbert Funk. After acquiring an exclusive licence for the soles, the Griggs created a simple boot with a distinctive welt stitch, grooved sides and black-and-yellow heel loop. It was named the 1460 after the date of its inception – 1 April 1960 – and remains one of the brand’s bestsellers.
All our channels are growing everywhere in the world, but direct-to-consumer is growing faster than wholesale
Kenny Wilson, Dr Martens
“Dr Martens combine comfort with a classic and very practical style which, thanks to innovative and imaginative styling, has a really broad appeal,” explains Penny Graham, clerk at footwear organisation the Worshipful Company of Cordwainers. “The combination of the air-cushioned sole and the robust leather upper, often now enlivened with colourful stitching and other patterns, has proved to be timeless. The company has diversified, but every style is recognisably from the Dr Martens’ stable. This strong design ethos is a huge strength.”
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Dr Martens sits towards the top of the high street when it comes to prices. Its core line ranges from £115 for plain leather shoes to £169 for long lace-up boots.
As it approaches its 60th birthday, Dr Martens is enjoying stomping success. It was awarded Brand of the Moment at last month’s Drapers Footwear Awards and is riding strong financial growth. Group revenue jumped by 20% to £348.6m in the year to 31 March 2018 and EBTIDA was up by a third to £50m. Like-for-like retail revenue grew by 7% in the same period. Ecommerce revenue was up 35% to £43.6m and wholesale revenue by 16% to £207.9m. The brand has been owned by private equity firm Permira, former owner of New Look, since 2014.
“In my first week I stood up and said, ‘I’m going to do three things: I’m going to listen first, then learn, then lead, so don’t expect me to do anything fundamental for the first three months,’” Wilson tells Drapers. “What I tried to do was go out and meet as many people as possible so that at the end of those three months, I had a clear picture of what was happening everywhere.
“The company was performing well, so it was just about saying how we can optimise what we’re doing, and help the leadership team narrow its priorities, because I felt we were doing too many things.”
It truly has made the leap from British footwear manufacturer to a global brand
Gerry Demopoulos, Tower London
Wilson refocused the business on its core strategy of driving direct-to-consumer sales, building sustainable growth and concentrating on the consumer.
“All our channels are growing everywhere in the world, but direct-to-consumer is growing faster than wholesale,” he explains. “Most brands can sit back and say that direct-to-consumer is growing, but what’s different about this business is that we’re growing in double digits everywhere.”
Wholesale currently accounts for 53% of overall trade and direct to consumer 47%. Wilson expects this to move closer to a 50:50 split over the next 12 months. Dr Martens has around 300 UK wholesale stockists, including Asos, Schuh, Urban Outfitters, Office and footwear independent Tower London.
“Dr Martens is one of the first brands Tower London ever stocked,” says Gerry Demopoulos, the retailer’s director. “Under the stewardship of Permira, Dr Martens has come on leaps and bounds in its growth, organisation and strategic vision. It truly has made the leap from British footwear manufacturer to a global brand. Its appeal has widened, as has its product offering.
“At Tower London, we enjoy a multi-generational relationship with the brand. Despite all the changes and the growth, we feel like we are still dealing with a close family friend and business partner.”
Our goal over the next five years is to double the size of the store estate
Kenny Wilson, Dr Martens
Wilson explains that the brand is concentrating on fewer, but better, wholesale partnerships.
“During the time Permira has invested in Dr Martens, we’ve reduced the number of wholesale doors we’re in quite dramatically but the wholesale business has grown. That means we’re doing more business through fewer doors, which I think is the way to go. Wholesale is really important to the business, but we want to have close, strategic partnerships.”
“We’ve heard that Dr Martens has been culling the number of independents that they are stocked in quite aggressively,” says one source.
“They are still in some indies, but they only want to be in retailers that they feel really reflect the quality of the brand and have strong adjacencies.”
An enthusiastic Wilson is particularly excited about the international opportunities ahead for Dr Martens and plans on doubling its store estate, although he cautions against opening a flood of stores in any single market.
“We currently have around 110 stores around the world, which is quite small if you think about the size of the brand. Our goal over the next five years is to double the size of the store estate. We’ve got 35 stores in the UK and I’m pretty much done – the days of a brand wanting 150 stores in the country the size of the UK are done. However, if you look somewhere like Germany, we’ve got four stores in a market of 85 million people. You could apply the same logic to France and we’ve no stores in Italy.”
The business is underdeveloped when it comes to digital
Kenny Wilson, Dr Martens
Wilson is well placed to help the business grow internationally, having spearheaded Cath Kidston’s expansion into Asia and worked extensively overseas during his near two-decade stint at Levi’s. He held several roles at the denim label, including brand president for Europe, the Middle East and Asia and senior vice-president of commercial operations. As well as key European markets, Asia and the US – where it has 25 and 27 stores respectively – will be a particular focus for Dr Martens.
“There’s so many opportunities internationally that we don’t want to get distracted by too many things. North America will be a focus and we feel that we can double the size of the Japanese market. We’re quite well developed in Korea, but we’ve hardly started in China, and haven’t touched the sides of south-east Asia.
“The great thing is that I haven’t even mentioned the opportunities in Spain or eastern Europe. There’s so many places that we’re underdeveloped, it’s about what we focus on first.”
Growth at Dr Martens is also underpinned by extensive investment in the brand’s infrastructure, particularly in IT. The UK website was replatformed last year and software that allows Dr Martens to process data faster is being introduced across the business.
Online represents 15%-20% of sales, but Wilson admits that the brand has some “catching up to do” when it comes to its digital offer.
“We don’t offer click-and-collect today because we didn’t have the systems in place – we’re just putting those in. We’ve also just introduced order in store, which launched at the back end of last year. The business is underdeveloped when it comes to digital and we have to try and stop ourselves from thinking about too many blue sky options until we’ve caught up to the market. But we’re in a good position compared with where we were 12 months ago, and we’re catching up fast.”
The honest truth is that the company is not up for sale at the moment
Kenny Wilson, Dr Martens
UK manufacturing has been earmarked as another area for growth. In February, Dr Martens announced plans to double production at its Northamptonshire factory by 2020 through a £2m investment. The target is to make 165,000 pairs at the Wollaston site each year.
Currently, the premium Made in England range – prices in the collection range from £150 for shoes to £230 for boots – accounts for 2% of sales.
“The investment at Wollaston has been driven by the fact that it’s extremely important to us that we preserve our history and because the Made in England range is growing so fast. We could sell a lot more than 2% but we just can’t make the shoes, so we need to invest in space and skilled shoemakers to scale this thing up.”
Rumours that Permira will explore a potential sale for Dr Martens swirled earlier this year, but Wilson downplays the whispers. He laughs that everyone, including his friends and his wife, have asked if the business is up for sale since the news hit the headlines.
“The honest truth is that the company is not up for sale at the moment,” he says. “However, this is the fourth private equity firm I’ve worked for and that is what they do: they buy businesses, invest, professionalise them and then they sell them.
“Permira’s average hold is between five and seven years and they’ve had DM for five and a half. We will sell Dr Martens at some point but when that will be is up to the owners. As long as I’m allowed to make decisions for the long term, it shouldn’t matter to our colleagues if we’re invested in by Permira or someone else. What matters is doing the right thing for the brand.”
A combination of iconic product, clear strategic priorities and a plethora of international opportunity will help Dr Martens stay one step ahead, Wilson concludes.
“This is a business with incredible longevity. The fact that the bestselling product today – the 1460 boots – is the same as it was 60 years ago shows that this is an iconic label that resonates with consumers. Dr Martens will be here long after I’m gone – I just want to make sure myself and the current leadership team do the best we can for the brand.”