Investment firm Marathon Partners Equity Management is turning up the heat on Dr Martens by urging the British boot maker to detail planned expense cuts and to buy back stock, people familiar with the matter told Reuters.

The increased pressure comes roughly two months after Marathon Partners’ managing member Mario Cibelli suggested Dr Martens launch a strategic review that could lead to its sale, arguing it was the best way forward for the company, whose chunky lace-up boots have been a fashion statement since the 1960s.

Cibelli has told executives it would be sensible for Dr Martens to lay out specific plans when it announces earnings later this month, the sources said.

A representative for Dr Martens declined to comment.

Last month the stock price hit a record low of 65.50 pence as the company forecast revenue in the key U.S. market would drop by double digits this year. Dr Martens’ share price has dropped 81% since its public listing in 2021.

On Monday, trading in London closed little changed at 85 pence. In U.S. afternoon trading, shares climbed 4.6% to $1.13.

Cibelli argued the company’s intrinsic value remains intact, but that management should seize on the lower share price to buy back stock now, the sources said.

The timing could be especially attractive now that Dr Martens is poised to start generating significant free cash flow.

Cibelli believes that the company may be able to generate approximately $750 million of cumulative free cash flow over the next three years as modest growth resumes, some cost savings are realized and excess inventory is reduced to normal levels, said one of the sources who is familiar with his thinking.

The sources asked to remain anonymous because they were not permitted to comment publicly on the private discussions.

At the same time, Cibelli told executives that investors are owed specifics about the company’s cost cutting program, especially in the wake of the company’s lowered profitability estimates.

Marathon Partners owns roughly 5 million shares in Dr Martens, making it one of its 30 largest investors.
In light of the company’s current market value of about $1 billion, Cibelli said earlier this year that the company’s exceptionally strong brand could make it attractive to potential buyers who might be willing to spend at least $2 billion to acquire it.

Under U.K. rules, Dr Martens would have to announce a formal approach to the company.

Dr Martens’ new chief financial officer, Giles Wilson, whose appointment was announced last year and who was scheduled to start next month, joined this month.

Dr Martens was bought by private equity firm Permira in 2014 and in 2021, it was listed publicly again. Permira still owns roughly 38.5% of Dr Martens.