Dr. Martens and Golden Goose Deluxe, the much younger Italian brand of distressed sneakers, are both owned by institutional investors who want to cash out with a high capital gain in the next few months. Both brands have been growing fast, thanks in part to strong investments on their direct-to-consumer operations, and they are both evaluated at a purchase price of more than €1 billion.
Permira, the London-based private equity firm that bought Dr. Martens in 2014 for about £300 million (€352.0m-$390.0m), is said to be looking for a valuation of £900 million (€1,056.0m-$1,169.9m) after consultations with Goldman Sachs and Robert W. Baird, which have been working on its sale for several months.
As reported (Shoe Intelligence, Vol. 21 N° 15+16 of Aug. 21), Dr. Martens continued to grow rapidly in the financial year ended on March 31, raising its revenues by 30 percent to £454.4 million (€533.3m-$590.7m), and its net income jumped by 70 percent to £85 million (€99.8m-$110.5m). With its ongoing momentum, the brand is said to be in line to double its profitability this year and to attain a turnover of £1 billion in five years' time.
Another investment fund based in Washington, D.C., The Carlyle Group, is said to be seeking a valuation of between €1 billion and €1.4 billion for Golden Goose, after consultation with Merrill Lynch, according to various sources. Acting through Bank of America, Carlyle reportedly invited candidates to present their offers by mid-December, and one of them is said to be Permira.
Besides Permira, other potential investors in Golden Goose are said to be yet another private equity fund, Advent, plus PVH Corp., Tapestry and VF Corporation. PVH owns Calvin Klein and other fashion brands. Tapestry owns Coach and Stuart Weitzman, among other properties. VF is the parent company of Vans, Timberland and many other brands.
Carlyle, which has made a fortune with other fast-growing brands like Moncler, invested in Golden Goose in 2017. Since then, the brand's sales have risen at an annual rate of about 30 percent, going up to €186 million in 2018. It was managed until September of last year by Giorgio Presca, the former chief executive of Geox who has been running Clarks since last March. With an Ebitda margin of 30 percent, the 19-year-old brand is said to be generating core annual earnings of around €80 million, similar to those of Dr. Martens, and to be targeting annual revenues of €500 million.
It will be interesting to see whether Dr. Martens and Golden Goose will be picked up by yet another investment fund that believes in their further development or by strategic investors who see also the potential for synergies. Both are attractive at a time when interest rates are low and money is cheap.