“There is a danger that they’ll stretch that brand and effectively kill it”: Stephen Cheliotis, chairman of the CoolBrands Council, on the Dr Martens sale
Permira, the private quity firm, will have to tread carefully if it’s to avoid ‘killing’ Dr Martens, the brand it bought today for £300m according to Stephen Cheliotis, chairman of the CoolBrands Council.
The irony of Dr Martens – the original anti-establishment, rock n’roll British youth brand – being sold to an equity firm was not lost on Cheliotis, but “in terms of the actual deal itself the reality is the average punter on the street won’t have a clue.”
“The marketing and business press will get excited about it,” explained Cheliotis. “But the initial excitement will die down and most people will be none the wiser, much the same as any other kind of business transaction. The reality is most people don’t know who owns what, who owns the various brands we buy on the high street, who owns the brands we’re picking up in the supermarket.”
But still, Permira will have to work carefully, or indeed, not at all, if it is to ensure the Dr Martens brand retains the appeal it had with the British consumer at the time of its sale.
“If the private equity firm starts tinkering with it and trying to reshape the brand that’s where it will run into difficulties,” warned Cheliotis. “Clearly if they start to try and milk the brand too much and get involved in too many products with brand extensions then again there is a danger that they’ll stretch it and effectively kill it".
However, Cheliotis did say: “If it’s like Coca-Cola’s investment in Innocent and the transaction involves more investment and further know-how and distribution but where the brand essence and the way it is communicated through marketing is left to the managements devices then it will probably be a good, positive deal.”
In an apparent anticipation of concerns that the brand would be overly commercialised with the deal, David Suddens, CEO of Dr Martens, said that Permira does respect and wants to “nurture” the “heritage and brand authenticity” which makes Dr Martens unique.