An activist investor in boot brand Dr. Martens is putting more pressure on the company to outline a plan to rightsize business.
New York-based investment firm Marathon Partners Equity Management, LLC, which owns more than 5 million shares of Dr. Martens common stock and is among the top 30 shareholders of the company, is urging the brand to outline how it plans to cut costs and recommending that they authorize another share buyback.
The news, which was first reported by Reuters on Monday, was confirmed to FN by Mario Cibelli, Marathon Partners’ managing member, who said he has discussed these requests with chairman Paul Mason and chief executive officer Kenny Wilson.
Dr. Martens declined to comment.
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The update comes shortly after Marathon in April said it sent a letter to Mason and the board of directors urging the company to begin evaluating “alternatives for the business with the goal of maximizing shareholder value,” which includes a potential sale of the business. At the time, Marathon argued that Dr. Marten’s tenure as a public company was no longer serving shareholders in the most productive way.
Since its IPO in 2021, shares of Dr. Martens have dropped almost 83 percent.
Cibelli told FN in a Tuesday interview that while Dr. Martens has outlined various business headwinds, it has yet to announce a plan to mitigate the challenges and cut costs.
“They owe their shareholders a better and detailed look into their cost cutting efforts,” Cibelli said, adding that Marathon still stand by its prior statement that it is not in the best interests of shareholders for Dr. Martens to exist as an independent publicly traded company.
Dr. Martens in April put out a cautious outlook for 2025 that suggested persisting weakness in the U.S. wholesale market. Ahead of its official full-year earnings report on May 30, the British footwear company said it expects U.S. wholesale revenue to be down double-digits in 2025 compared to the prior year, a drop which it said will impact profitability to the tune of about 20 million euros before tax. While there is a chance that wholesale sales improve from in-season re-orders, Dr. Martens said that is not a guarantee. Given this challenge, the brand is also investing in additional storage facilities to hold its products in the U.S., its largest market.
Higher inventory levels, while not ideal, are less of a challenge for a brand like Dr. Martens, which sells continuity product that can be resold year after year with little update, Cibelli said. He added that Dr. Martens will likely soon be in a stronger position to generate cash.
