Page 38 - February 2021

MARK FAITHFULL

Following

the Money

Mark Faithfull crunches the numbers as he looks at
analysis and expansion that reflects changing markets

DR MARTENS pUTS ITS bEST bOOT DESpITE $1.4bN HIT THIS UNREpENTANT FASHION
FORWARD WITH IpO RETAILER WON’T GO ONLINE
lassic British boot brand Dr Martens is readying itself ast fashion retailer Primark has said that store closures caused by
for an initial public offering and hoping to trade on European lockdowns will mean that it will have missed out on over
C the main market of the London Stock Exchange after F $1.4bn in revenues but stressed that it remains committed to its stores-
more than 60 years in business in what would be one of the only strategy and does not intend to sell online.
first big IPOs of 2021. Instead, the company said that it is confident of a resurgence in demand after
The iconic footwear brand has engaged Goldman Sachs the Covid-19 crisis ends, pledging: “We are going to be back.”
and Morgan Stanley as joint global co-ordinators, and Barclays, Because of the pandemic, at the time of writing 305 of Primark’s 389 stores
HSBC, Merrill Lynch and RBC Europe as joint bookrunners in around the world are closed, including all of its 190 UK shops, plus a further
the event that the float proceeds. 115 stores across European markets including Germany, Ireland and Spain.
A possible sale or float in the US was mooted as far Shop closures and other restrictions in Primark’s main UK and European
back as April 2020 but delayed by the impact of the global markets resulted in a 30 per cent drop in sales to $2.8bn during the 16 weeks
Covid-19 pandemic. to 2 January 2021, compared with sales for the Christmas holiday period in
Should Dr Martens proceed, the current expectation is that 2019 totalling $4bn.
immediately following admission it would have a free float of at During November and December, Primark lost sales worth $745M,
least 25 per cent of issued share capital and would be eligible prompting it to raise its forecasts of an $896M loss to more than $1.38bn for
for inclusion in the FTSE UK indices. Shares representing up to the six month trading period to 27 February 2021, assuming all its lockdown
a further 15 per cent of the offer may also be made available as stores remain closed.
an over-allotment option. John Bason, Finance Director at Primark’s owner, Associated British Foods
Dr Martens Chairman Paul Mason described the move as (ABF), said: “I hate losing the sales we are going to lose but we are going to be
an “important milestone” for the business, and said: “We have back. People will want to go on holiday, meet one another and shop at Primark
made significant investment in the business over the last few again. Are we losing sales here during these store closures? Yes, that is not in
years to strengthen the team, our operations and position dispute here. But that does not mean that it pushes you to make uneconomic
ourselves for the next exciting stage of development, as a decisions about changing a winning business model.”
publicly listed company.”
Above all, the proposed IPO is a huge vindication of a strategy
that has seen Dr Martens reconnect with the numerous
strands of its heritage and bolster a brand that chose to open a
flagship in gritty Camden, North London rather than London’s
West End. The company has leveraged the venue to showcase
unsigned bands and promote its musical roots.
Prior to the pandemic, Dr Martens had been busy but
careful in expanding its store network internationally. It
added Miami and Houston to its fledgling US store network
in September 2019 and was focusing its physical presence on
France and Germany.

M&S SIGNS MORE DEALS AFTER JAEGER AcqUISITION

arks & Spencer has struck deals with Phase Eight, Joules,
Hobbs and Seasalt, which means it will sell clothes by the
M brands from online and in its stores. The retailer said it has
chosen those retailers as they overlap with its own brands and will
help drive shoppers to its website by the spring season.
The deal comes after M&S bought Jaeger out of administration for
£5M, which marked the first fashion acquisition since the group bought
Per Una in 2004. However, M&S said it is not taking on any of Jaeger’s 63
stores as part of the rescue, resulting in 233 job losses.
M&S has also signed deals with Nobody’s Child and Early Learning
Centre in recent months, as part of its Never the Same Again programme.
38 RETAIL & LEISURE INTERNATIONAL
50 RETAIL & LEISURE INTERNATIONAL NOVEMBER 2018