Photographer: Simon Dawson/Bloomberg
Dr. Martens Ousts CEO in Middle of Private-Equity Revamp
Dr. Martens has never had sales to match the cultural relevance that comes with being worn by the likes of Pete Townsend, Kurt Cobain and many rock stars in between. That widespread recognition made the company a tantalizing target in 2013, when the private equity firm Permira bought the rubber-sole boot maker for nearly $500 million—and now those growth plans have hit a snag.
Dr. Martens announced on Friday that Chief Executive Officer Steve Murray was leaving in an attempt to speed up the company's transformation. The current chairman, Paul Mason, will take over during a search for a new chief executive.
"Steve has done some great work putting people and structures in place and we are now well placed to move into a new phase of accelerated growth," Dr. Martens said in an email to staff.
As Permira has pushed for growth, Dr. Martens expanded beyond its sturdy boots and shoes. Murray, after taking over a 1,000-employee company that had been owned by the same family since 1901, added new products influenced by sneakers and casual footwear, opened Dr. Martens-branded stores, and overhauled e-commerce operation.
Sales hit nearly 290 million pounds ($390 million) for the year ended March 2017, an increase of 25 percent over the previous year and a sign of a turnaround taking hold, but remain a fraction of the $3.6 billion of Sketchers USA Inc. The company said new leadership is needed for the next phase.
Mason, named chairman in 2015, has experience selling a company. He was previously chairman of New Look, a retailer bought for 780 million pounds ($1 billion) in 2015 by the South African investment company Brait SE. He was also an executive at the online grocer Asda Stores Ltd. and jean maker Levi Strauss & Co.
“As Dr. Martens enters the next phase of its history, it is trading well and is ideally placed to accelerate its growth still further in the years ahead,” Mason said in a statement.
To succeed with Dr. Martens, Permira has been trying to lure back former customers while expanding into new areas. There are now dozens of Dr. Martens stores at which songs by the Clash play on heavy rotation, and shop clerks sport tattoos and piercings. The ankle-high boots at the center of it all—as are men's loafers, some with tassels. There are also sandals and sneaker-inspired looks that drift from the company’s counterculture image.
Murray seemed a good fit when he joined the company in 2014: an exacting boss with an emotional connection to the iconic boots and a sharp turnaround plan. In an interview earlier this year, he recalled turning the laces on his Dr. Martens over to the police before entering a soccer stadium near his English hometown. This was during the 1970s, when the shoes were popular with a particularly rowdy demographic. With unlaced boots, police reasoned, the soccer fans couldn’t fight.
“It wasn’t a particularly successful strategy,” Murray said.
He didn’t wear his black boots as much while embarking on a career as an executive at Vans, Urban Outfitters Inc., and Decker Brands’ UGG. It’s a choice made by many Dr. Martens customers who associate the lace-ups with their younger days. That’s one problem the changes to the product line under Murray were meant to address—to draw back those former fans.
With a shaved head and brawny build, he looked like somebody who would have done alright in a scrap. During a karaoke session with staff last year, Murray belted out an energetic rendition of the Ramones’ "I Wanna Be Sedated." As chief executive, he favored a Dr. Martin slip-on boot called Chelsea. “They are more age-appropriate,” he said.
Murray tried to balance in maintaining the company’s rebellious attitude—he put a drum set and other rock-inspired flourishes inside its new London offices—while also acknowledging the need to grow fast under private-equity owners. Permira once owned Valentino Fashion Group and sold Hugo Boss AG in a 2015 transaction the firm said returned 2.5 billion euros. “The nature of these things is you want to start seeing yourself go up,” Murray said earlier this year. He added: “We know that at some point, there’ll be a sale.”
In a statement Friday, Murray said it was “a privilege to lead the company through this important phase in its history.”