Dr Martens CFO on developing a global footprint

When Jon Mortimore arrived at Dr Martens he immediately set about helping transform the brand into a world class operation. But one thing was getting in the way- the company itself.

By that he means that the footwear group had failed to fully benefit from the cult status its boots and shoes have gained over the years, ever since the Who guitarist Pete Townshend took to wearing Docs in the 1960s.

“The brand wasn’t living up to its potential,” says Mortimore, a sprightly 51-year old born in Newcastle who grew up in Essex, where he wore Docs as a teenager.

“Two things struck me on arrival at Dr Martens,” says Mortimore. “The breadth of the range and that we’re not a UK company, 80% of revenues are from outside the UK, although this is the second largest market outside the US.”

Backed by powerful private equity firm Permira, Mortimore has been joined by CEO Kenny Wilson, a veteran of jeans maker Levi’s and iconic accessories group Kath Kidston, who knows a thing or two about building a global brand, and especially taking on Asian markets.

Consumer specialism

When Mortimore landed at Dr Martens in April 2016, he brought huge experience from leading consumer p;layers. From junior accountancy roles at Guinness, including a stint at the US arm of United Distillers, where he gained a first insight into how finance can help drive strategy, he moved to hotel group Forte until it was acquired by conglomerate Granada.

He learnt plenty working on the defence team, before moving to stationers WHSmith where he acquired senior roles including financial controller, before a first finance director position at the group’s book publisher Hodder Headline, which he describes as a “completely different culture.”

Then it was on to become finance director of UK retail at WH Smith, by now a £1bn-plus group, before returning to the hospitality space as CFO of Travelodge, joining chairman Keith Hamill who had been previously FD of the stationer.

Mortimore spent nine years at Travelodge, which was seeking to change the face of the hotel industry through implementing internet-based booking systems revolutionised by airlines- where Mortimore got to grips with the private equity model of ownership (it was owned by Permira). “For a public company with six-month reporting, the ability to drive long term returns is interrupted by short term requirements for the City and the need to smooth stuff out. But if you are in PE, and you’ve got strong management, you can drive long term returns,” he says.

Brief stints at housebuilder Avant Homes and student accommodation provider Liberty Living, made Mortimore realise that he yearned to be in a high-volume consumer goods business again, where he could make a difference. “Dr Martens had been cash-starved, and nearly went bust in the early 2000s, and then it came back again, but because there had been no investment in IT, it had just been a case of living hand-to-mouth,” says Mortimore.

There was also a failure to drive the value of the brand, where he knew he could make a powerful contribution.  “We would sell to a distributor or wholesaler, and they would then worry about marketing, sales, customer relationship, distribution. It was a very old-fashioned way of doing things, whereas with a modern, successful brand, you own the customer relationship yourself,” he adds.

Brand not commodity

Mortimore says he and Kenny Wilson have led the company with a much more entrepreneurial mindset, starting with finessing the finance function so that it can help drive value. “First of all, I put together a set of coherent management reports, addressing the questions of: what’s the story, what do I need to worry about? What’s happening in major channels and major markets?

“From there we could get clarity of information to produce a clear and agreed strategy, with which we could then allocate resources and drive value. It’s all about forecasting and projections, using as many data points as available, including a sense check of underlying assumptions,” he reveals.

Mortimore says business partnering experiences in previous roles, especially working closely with marketing, was hugely valuable for his current role. “At Dr Martens finance had never spoken to anyone else before, so I was going around asking people what do you want to do, what’s worked and what hasn’t worked, if it’s worked why has it worked? If I could double the amount of money behind it, could you double the returns or not?”

There was also a minimum investment mindset, reveals Mortimore- who wears a pair of Docs when we meet. “It was all about don’t spend, don’t invest. The investor and the board were urging the company to invest, but the company couldn’t get its head around that,” he says.

Now there’s a clear approach to investing in key areas such as online which has grown in the last 3-4 years, “mainly as we’ve understood the power of the brand,” says Mortimore.  The group is also opening shops in prime locations to showcase the product. “When we open up a store, web sales grow exponentially in the area around it. “Rather than a retail strategy with ecommerce, it’s an ecommerce strategy with retail. It’s no longer the old school thinking that they’re two different channels, they’re actually one channel,” he adds.

Social media also plays a big part in keeping abreast with consumers- the brand has 2m Instagram followers, which compares favourably with US bootmaker Timberland. “It’s not forcing our advertising on our customers, it’s letting them share their stories with us- which given that it’s an empowering brand makes sense,” says Mortimore, mentioning that at least half the brand’s customers are female.

Where next?

Mortimore and Wilson are very keen to continue the momentum at Dr Martens which last year saw EBITDA rise 33% to £50m on sales up 20% to £348.6m. A key aspect is having a global mindset, tracking themes and styles across different parts of the world.

Mortimore informs me the group’s creative design team, which spends a lot of time visiting different cities around the world, are in Japan when we meet. “In Japan and China we’re high end fashion, whereas that’s less the case in the UK and US,” he adds.

To really help drive the brand, Dr Martens recently located to central London from Northamptonshire- the traditional heartland of the UK shoe industry. In Camden offices its social media and other brand story-telling functions are located near the world-famous market, the mecca for young fashionistas keen to experience London’s cool counter-culture. “If you’re a global business you need to be located in London, and as Camden is the home of the brand, where else would you be?” he asks.

“In London you’ve got diversity of people, in terms of male/female, language, upbringing, culture. If you’re a global brand you need all those different elements coming together, otherwise you can’t possibly understand how the world is,” he adds.

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