Directors’ Deals: Dr Martens chief fills his boots 

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The past few months have been challenging for iconic bootmaker Dr Martens. It kicked off the year with a profit warning after experiencing “significant operational issues” at its new distribution centre in Los Angeles. Three months later it downgraded its Ebitda forecasts again — this time from £255mn to £245mn. 

North America is proving particularly troublesome, and not just because shifting distribution from Portland to LA has turned into a logistical nightmare. US consumers have also been spending less than management expected — particularly on the brand’s famous boots. 

The company said “fixing the issues” and “returning America to good growth is our number one operational priority” but the process is unlikely to be painless. Group Ebitda margins are expected to be 5-6 percentage points lower in the first half of financial year 2024 before rebounding in the second half, and US sales are still falling, a trading update this month confirmed.

Chief executive Kenny Wilson is taking advantage of share price weakness, however. On July 14, Wilson bought 308,948 shares for a total of £400,000. According to FactSet, Wilson now owns £2.6mn of shares, or 0.19 per cent of the company’s issued share capital. 

Dr Martens currently trades on a forward price-to-earnings ratio of just 12.8, compared with a five-year average of 17.3. However, the group’s share price is not showing much sign of recovery just yet. 

Dr Martens fetched a valuation of £3.7bn during the oversubscribed IPO in January 2021. However, the margin pressure, weak consumer spending and logistical issues means that its market capitalisation now sits at just £1.4bn.

Storage exec unlocks capital

A Lok’n Store director has offloaded £2mn worth of shares, cutting his stake in the company by more than a third at a time when the business has just completed two share placings.

Non-executive director Charles Peal sold 267,049 shares at 770p each, leaving him with 499,301 shares, or 1.5 per cent of the company. Lok’n Store attributed the sale to “personal tax planning” reasons. Peal “intends, subject to market conditions, to reinvest the majority of the post-tax net proceeds into ordinary shares in due course”, it added. 

The sale is the latest and largest in a series made by Peal over the last couple years, which have reduced his stake by almost half. In July 2021, Peal owned 874,498 shares representing 2.95 per cent of the company.

In May this year, a group of other directors sold a combined 1.36mn shares for £11mn at a 5 per cent discount through a secondary placing to institutional investors. Chair Andrew Jacobs sold the bulk of these, making £10mn from 1.25mn shares priced at 800p each. Peal and his wife sold £800,000 worth.

The company said that the secondary placing was in response to increased demand for its shares. It followed this up with an oversubscribed placing for retail investors earlier this month which raised £20.5mn through the issue of 2,679,739 new shares priced at 765p apiece, accounting for 8.9 per cent of the company. This was the first UK public real estate equity raise in over 12 months, according to Stifel.

Stifel analyst John Cahill said this was “not the damn bursting, by any means”, but he hailed it as a positive sign for the sector. This month, real estate investment trusts and housebuilders enjoyed a bump following better than expected inflation data, which some saw as a sign that the end of the Bank of England’s rate-hiking cycle might be in sight.