What Dr. Martens’ IPO journey says about London’s financial future

Rebel without a cause.
Rebel without a cause.
Image: Reuters/Edgar Su
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Dr. Martens has come a long way from 1960, when the company’s now-famous boots started rolling out of a factory in a small English town. Its journey from provincial beginnings to global fashion symbol traces Britain’s history as it became a financial powerhouse. As the iconic boot company prepares to join the UK’s public market, it’s an open question whether the country’s financial sector can pull off a similar reinvention.

When Bill Griggs and his family bought the license for an air-cushioned sole for work boots, the British economy was thriving, though not quite as much as its peers in Europe. “European economies in general, including industry, had a boom period after World War II,” said Dr. David Chambers, a professor at the Judge Business School at the University of Cambridge. “Growth, including industrial output, was fairly strong in most countries. The UK was one of the laggards, however.”

Then as now, Britain was mapping out a new economic future. Instead of becoming a founding member of the European Common Market, a precursor to the EU’s single market, the UK tried to rebuild its economy by establishing a free trade with its empire. That ultimately made British industry less competitive, Chambers says, as UK companies were sheltered behind imperial tariffs instead of going head-to-head with the likes of France, Germany, and Italy.

During the 1970s, UK industry—and the workers Dr. Martens boots were originally designed for—was struggling, and the sector shrunk considerably in the coming years. But Dr. Martens began to transcend factories and manufacturing after The Who guitarist Pete Townshend wore them on stage in 1967. Over time, the footwear went from a £2 boot for bobbies and workers to a fashion symbol for punks and rebels, becoming an almost permanent fixture in subculture.

Britain’s economy was changing, too. The UK’s already long-running shift from a manufacturing-led economy to one that was driven by services, including financial services, was gaining momentum in 1970s. Britain joined the European Economic Community in 1973, which would eventually give it access to the bloc’s single market. London became the region’s financial hub.

The sector was supercharged in 1986 by prime minister Margaret Thatcher’s Big Bang, which deregulated the City of London and the London Stock Exchange. As Chambers puts it:

“It blew the cold winds of competition through the City of London. It was a dramatic change, which is why you saw a dramatic shift in the identity of banks, brokers and other financial firms thereafter. It was fundamentally important to London returning to being the leading global financial center it had been before World War I.”

Retail apocalypse

Dr. Martens survived the decline in manufacturing in the previous century for some of the same reasons it has thrived during the retail apocalypse, spurred by online shopping, as well as the Covid-19 pandemic: The company made the impossible-to-replicate leap to cultural icon that’s beloved by consumers and designers. Now the boots are in the same category as Ray-Ban wayfarer sunglasses or Levi’s jeans, says Andrew Groves, a professor of fashion design at the University of Westminster. “They don’t need the high street,” he said.

As malls, department stores, and retail streets around the world suffer from online competition, Dr. Martens has been selling more and more of its boots straight to its customers, which it says lets it “better showcase” its brand and collect more data about customers. It runs 130 of its own shops and has ramped up its own e-commerce business, which roughly doubled from March to September versus the same period a year ago. Revenue jumped 48% last year to £672.2 million.

These days the company’s top-shelf “original silhouette” boot retails for £239—a whopping 120 times the cost of the company’s flagship model at the outset. Permira, the private-equity company that bought the boot maker from the Griggs family for £300 million in 2014, is poised to make a bundle: Dr. Martens is expected to fetch £3 billion or more when it lists on the London Stock Exchange this year.

Groves thinks this is the future of retail. In the coming decade, he predicts there will be high-end experiential fashion, from couture objects to Levi’s jeans and Dr. Martens, which have their own meaning and cultural connections, and then there will be mass-market clothes. But not much else. “That middle fashion is going to disappear,” he says.

The future of London

Dr. Martens may have little need for department stores, but London Stock Exchange and the City of London need Dr. Martens and its IPO.

The country’s public market has shrunk more quickly over the years than those on the Continent, according to Oxera, a consultancy, and the UK’s stock listings are dominated by last-century industries like mining, finance, and energy. Its stock market is overshadowed by New York when it comes to listing the sexiest, fastest growing tech companies.

What’s more, the industry was largely left out of the country’s Brexit agreement with the bloc. Share trading of EU stocks for European customers was the first casualty, as some €6 billion ($7 billion) of daily trading went back over the Channel overnight, raising questions about which parts of the sector could be next.

As Britain figures out a new path, Rishi Sunak, Britain’s Thatcherite chancellor, is talking about a “Big Bang 2.0,” and is considering revamping its rules for IPOs and other financial services to make the sector more competitive.

London has reinvented itself before. The question for the UK is whether it can transcend its old place in the EU and the rest of world the same way that Dr. Martens’ yellow-stitch boots made the leap from factory floors to fashion runways.