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10 December 2019 By Dasha Afanasieva Follow @dasha_reuters

The iconic bootmaker is on the block. If owner Permira sells at the same multiple of EBITDA that it paid, it will earn a 20% annual return, Breakingviews calculates. Buyers must weigh up whether an online backlash over shoddy shoes means cost-cutting has worn out the brand.

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Permira is selling British bootmaker Dr Martens Airwair, according to media reports. The private equity firm is seeking a price tag of as much as 1 billion pounds, the Sunday Times reported on Dec. 1.

A wave of online complaints over deteriorating quality of the shoes has raised concerns about private equity group Permira’s stewardship of the company.

Dr Martens insists the company’s growth is due to investment rather than driving down costs.

“Operating expenses grew by 30% last year, and for the period of Permira’s ownership, investment in operating expenses has been larger than revenue growth,” a spokesperson said.

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