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Ecommerce on Tap is a world where Supply Chain meets storytelling. Join Aaron Alpeter each week as they offer insights into the backend of successful businesses. Brought to you by Sourcify and Izba Consulting!
Daniel Barkin (00:00)
The company sells one boot, it's $200, it's well made, it's repairable, it's supposed to last for 10 years. Every customer tells their friend, you gotta get these pair of shoes. Most comfortable shoes, they're cool. I get so many compliments, you gotta buy these. It sounds incredible, right? I would who would wouldn't want to have that business?
Aaron Alpeter (00:24)
Hey everybody, welcome back to Ecommerce on Tap. I'm your host, Aaron Alpeter. I hope your morning walk or your late night wind down is going well. And thank you for spending part of your day with us. If you're new here, each season we do a deep dive into a different industry, exploring the brands whose stories, their supply chains, their exit potential,
Offer useful lessons about where the category has been and where it's headed. This season we've been focusing on footwear. It's been a really interesting and complex journey and stuff that we've gone through the history of the category. We've explored companies like Birkenstock, Rothys, and New Balance. As you're probably aware by now, we've been bringing in rotating co-hosts to help tell these stories. And co-host is someone that I've known for a long time. He's one of my favorite people.
And as he reminded me, it is seven years to the day that he and I started working together. So Daniel Barkin worked in the athletic department at USC when he was in college and still has a lot of close connections. Universities were always talking college football. And now that they're both in the Big Ten, it's a lot more fun. he got his professional career started at Groundworks Coffee, and so he's my go-to person for all things coffee. he led all their supply chain and purchasing work, and he is still at the Flex Company where he leads their supply chain. So
Daniel, thank you so much for being on the podcast and and for doing this. It's it's great to see ya.
Daniel Barkin (01:36)
Yeah.
Thanks for having me. yeah, man, seven years. Crazy. I was just looking at my calendar. I'm like, wait a second. This is this is amazing. but yeah, it's I mean, I think this is great. big fan of e commerce on tap. Make sure you're liking, subscribing, you're listening. really cool co hosts, really cool people, really cool case studies. I learn something new every time I listen
Aaron Alpeter (01:59)
so Daniel, before we dive in, I I want to share two stories just to kind of kick us off and and set up the the episode. So the first one is my college roommate had this pair of ten dollar foam sandals, like the really cheap ones. and he wore them everywhere. They were kind of disgusting. They were like always black from his feet and stuff. Like I used walking around in downtown Cleveland.
Daniel Barkin (02:21)
Really getting
his money's worth.
Aaron Alpeter (02:23)
He's no beyond beyond his money's worth. I mean, these things were indestructible. And he loved them because he wore them not around not just around Cleveland, but he would hike like Machu Picchu in them. He traveled to Bali, he traveled to Europe. And these $10 flip-flops were everywhere. And they basically looked the same, although a little bit dirtier, years later. Like they held up so well. And fast forward to just a few years ago, and I was in the process of changing running shoes. So I I used to have very supportive running shoes and I was I was slipping over to more barefoot running.
And so I needed to get this specialty shoe that I guess I have really wide feet, so I had to get a like a wide clown shoe looking thing. And after about a year, the sole started to separate from the upper. And so like I was like, my gosh, this these were really expensive. I took it to a repair shop and it was a pretty straightforward fix. And the the the cobbler, I that's what you call them, the shoe repair person said, yeah, I I can repair it, but this repair is gonna cost almost as much as replacing the shoe.
Daniel Barkin (03:21)
Yeah. It's crazy. it's it's so funny. We're talking about shoes. And two weeks ago I was on vacation with my family. we're walking around Lake Tahoe, just you know, me, my wife and and our kids, and all of a sudden, without any warning whatsoever, my wife's expensive brand name, water friendly flip-flop shoes just completely separated. The sole just split in two. And we're like
These are like not old. They're like they were like maybe a year old, if that. they were a brand name. I bought them at I think REI, like totally legit shoe and just completely split in two. And we had to go. Thankfully my cousin works at a a shoe store in Lake Tahoe and we went and he was like, Yeah, this is just what happens now. We just you know, we we recommend people replace their replace these every every year to two. It's really like you wear you get used to it or they they break in, they
fall apart and you get another pair.
I can't remember the last time I took a pair of shoes to be repaired versus just buying another one.
Aaron Alpeter (04:25)
You don't. You you just you scrap them, right? And and I think that people don't expect them to last as long. Like the economic life of of
Daniel Barkin (04:33)
Totally.
Aaron Alpeter (04:33)
shoes has has changed completely. And so, you know, the the shoe might be physically impossible to repair, right? Or like or it could be like you could fix it. But if if you've got enough time, enough skill, sort of thing, you could probably fix the shoe. But the shoe wasn't designed, it wasn't economically viable to go through.
Daniel Barkin (04:50)
You can super glue or duct tape
anything together. It's great.
Aaron Alpeter (04:54)
Exactly.
Daniel Barkin (04:55)
which bring just like to me it's bigger than one brand versus another, right? Like why don't shoes last? Why don't they seem to last? Do manufactur like is there value to manufacturers in making shoes last longer? Or is there value in making shoes like you said, like they're they're made to be worn for a discrete period of time? Did they is this like something where they're intentionally making shoes worse to get you to buy another pair?
like when you're shopping for shoes, are you shopping with longevity in mind? Are you shopping with comfort in mind? Looks in mind? Like what are you thinking about? when, you know, is this like an industry-wide thing or have you noticed a difference from brand to brand?
Aaron Alpeter (05:34)
Well, I I think that's kind of why we wanted to to profile Dr Martens on on this episode, because you know, so much of footwear that we've talked about is how things are changing, the technology, the legacy, you know, using in innovative materials. But this whole question of why don't they last is like a key question that talks about where the industry is and and where it's going. Because they you know, Dr Martens, everybody knows what Dr Martens look like. If you don't know pause it go look at it. You're like, I've seen these everywhere. They were in high school, they were
in college at our concert, etc. And they became famous by selling a boot that looked permanent, right? It was thick leather, heavy sole, visible yellow stitching, and the product
Daniel Barkin (06:12)
And they looked and they felt
like they were gonna last forever.
Aaron Alpeter (06:17)
yeah. And it became, you know, they're based in the UK. So it was a multi billion dollar public company that was selling this permanence, this idea of permanence, while having this the economics of fashion where you need more than one pair or you need to replace things like that. And so it's it's just this really interesting piece of, you know, does the customer need to own several different versions of the boot? or or is it something that, you know,
Daniel Barkin (06:42)
Yeah.
Aaron Alpeter (06:42)
one is good enough and you just you can just use that everywhere?
Daniel Barkin (06:46)
Totally. And has there been a shift as as the Dr Martens as a company has evolved, right? Are old Dr Martens better than new Dr Martens? it's it's like, is it a product question? Is it's it's almost it feels almost too siloed, too narrowed to really answer. And the bigger to me, the bigger question is really when what is a company's reputation? How does that reputation change over time?
When a company's reputation is built on durability, like we talked about with Dr Martens, like you mentioned, but growth depends on people buying shoes and people buying more than one pair of shoes and and fashion based, right? Like we want you to have multiple pairs of of a shoe that you can wear at different times. How do they survive? How do they grow?
Aaron Alpeter (07:34)
Yeah, and and this story is so interesting because it's not only going to answer that question, but it also looks at this near death experience that Dr Marten's had and where they moved most of their production away from Britain to
preserve like the company. but
Daniel Barkin (07:47)
Okay. I heard that.
Aaron Alpeter (07:49)
it also separated them from like their trademark, their factory, this reputation for durability, quality, all those sorts things. And so it's this really interesting piece about how do you preserve the image of the product after the operating system behind what made that product is is changing.
up until very recent, like the history of footwear, if we go back from, you know, caveman puts leather on foot to to today, the assumption was that the shoe was gonna fail in stages. And so the the outsole would typically wear out first and then maybe it's the heel or the upper. you know, certain parts become more comfortable with them.
Daniel Barkin (08:22)
Totally different life cycles for different
components of the shoe. It wasn't thought of as a monolith as as one homogenous unit.
Aaron Alpeter (08:29)
Exactly. The the goal wasn't to make everything in the shoe, every component, last forever. The goal was to design a product that had predictable wear that didn't require throwing the whole thing away because these were custom. They were difficult to make. I mean, there's a reason that after big battles in Europe people would come in and and you know take boots off of of fallen soldiers because these things were inherently valuable and you wouldn't even think about that today.
Daniel Barkin (08:52)
Yeah, it makes sense, right? Like it makes sense. Different materials should have different life cycles, Different parts of the shoe, they should have different wear patterns, right? If your shoe is wearing perfectly evenly in in a in a way, then are like it makes you it makes you really think about what that shoe's made of and how it's put together, right? And it's almost counterintuitive to think about it from a sustainability point, right? The most sustainable shoe isn't necessarily
The one that never breaks when when we think about shoes and and sort of the purpose and and how they were originally manufactured, but the one that breaks in the way is designed to break so that it can be resold or rebuilt or have have these discrete parts be replaced or repaired in a in an in an understandable and predictable pattern, right?
Aaron Alpeter (09:40)
Yeah, you you you're absolutely right. It's almost like I think about, you know, machines in a factory, or you think about, you know, your car. a
Daniel Barkin (09:46)
Totally.
Aaron Alpeter (09:46)
good machine has these sacrificial components. You don't want the entire machine to fail because an inexpensive component reached the end of its life. Imagine if you had to throw away your car because the tires w ran out, right? Or or because the air filter was was no good. It just doesn't make any sense.
Daniel Barkin (09:59)
The transmission
could wear at a d at a different rate than the tires or the timing belt or other parts of a car that I don't I don't know what they do.
Aaron Alpeter (10:09)
All good, yeah.
Daniel Barkin (10:10)
Yeah.
When you hear consumers say things like, They don't make shoes like they used to, old old man yelling at cloud, and right, they might notice a real material change. Hey, like this upper feels different, this sole feels different. they might not even realize, right? there's a much longer and more complex system involved when
Customers or consumers are saying to themselves, Hey, what's how long is this shoe gonna last me? Do you add when you're when you're shopping for shoes, you ask the person at the store, Hey, how long is this shoe gonna last me? And and what's their answer, right? I don't yeah, it lasts about, well, how often are you gonna use it? Well how you know, how often do you run? Or how often are you, you know, is this an everyday shoe? Is this a shoe that you're wearing a couple of times a week? I think we reward things in store because that's what sells shoes, I would think, low weight.
instantly comfortable, lots of choices, colors, brands, available right away. Can I get can I walk out? Can I wear these out of the store? Right? Is that the famous thing? I want to wear these shoes out of the store. or I want them to be delivered the next day. But it's almost it's almost like we've it's it's secondary now. Well how long is this shoe gonna last? Like how how what you know when am I going to need to buy another pair?
Aaron Alpeter (11:25)
Yeah, no, it reminds me of the story that experience I had. So when I was nineteen, I served a mission for my church and and moved to Sweden. I remember buying a pair of dress shoes, which I was gonna wear every day for twenty hours a day and like be walking a bunch and all this sort of stuff. And I went to the the Echo store and I talked to them, I'm like, Hey, so I'm gonna wear these a lot. Like, how long are these gonna last? Like, will these last a couple of years? He's like, yeah, sure, no problem. And I'm like, No really, like, will they?
And they lasted one year, but I think I probably put them through 10 years worth of of wearing for people that go in front of the desk or stuff like that. Yeah,
Daniel Barkin (11:55)
miles. Yeah. The odometer was was different. The pedometer.
Aaron Alpeter (11:59)
exactly. So I won't I won't fault echo for that. But you're right. Like that was the one time I went in and I asked how long was it going to was the shoe gonna hold up? And I think that's interesting is because all of these things that you mentioned about weight and density and expectations, these have operating consequences. You have to treat the product.
you know with the construction that it needs. So you have to look at this and say, all right, do I need more skilled labor? Do need more expensive materials? Do I need longer lead times in order to deliver the customer promise that I'm trying to sell from a brand point of view? And durability isn't necessarily, can I make the shoe stronger? It's like, can I make it, can I distribute it? Can I sell it? Can I maintain it? And can I have a enough profit from a stronger shoe within this modern consumer ecosystem where people think of footwear as disposable versus something that is kept in
Daniel Barkin (12:44)
Yeah.
Aaron Alpeter (12:45)
hand down.
Daniel Barkin (12:46)
Yeah.
Aaron Alpeter (12:46)
And I think that
this is where we really start to get to the the strange beginning of Dr Marten's, because their goal wasn't to attempt to make an indestructible boot. It was really to make a rugged boot less unpleasant to wear. And and so why don't we start here? Like who who like who is Dr Marten's and and how did this German medical solution become one of the most recognizable British products in the world?
Daniel Barkin (13:08)
Yeah, as all long lasting brands, they started as a German medical solution, obviously. That seems that can you yeah, I mean I I frequently think of the brands I love and look back and they started as German medical solutions. But you would think, right, Dr Marten's gotta hap like there's gotta be some London factory. I'm thinking like, you know, old timey movie or a punk concert.
British shoe factory, someone was like, I I'm not I'm not gonna do a British accent. your your listeners are are should be thankful. but no, it begins in a Munich factory at the end of the Second World War, 1945, 25-year-old German doctor named Klaus Martens recovering from a broken foot. So according to the company history, Martens found the standard military boot he was wearing.
Painfully rigid during his recovery. Which makes sense. Can you imagine? Like I I put on steel toe boots to walk through my factory, our factory, and they're not comfortable. There's nothing comfortable. There's there's very little unless I'm you're buying these custom made that that is comfortable about boots, right? And and that's what that's what Klaus Martens found. He found that standard military boots were painfully rigid, the traditional soles.
were built around hard leather, right? Think about it. They're made to withstand the the the perils of war. You know, running around who knows what you're stepping over, rubble, all these things. They were durable in the sense that they could withstand punishment, right? They durable in that you could fight a war in them. They weren't durable. It came exp it came at the expense of the person wearing them, right? Maybe their their foot was still, you know,
was still around to to tell the story. So durable that that amount of durability was important to them. but at the time, post-World War II, they weren't comfortable. Durable meant something very different than durable meant in the middle of a war. So Marten began wondering, can I retain the basic strength of a shoe while changing the what what my foot's actually feeling?
And he built an early prototype as any as any founder does, right? You just start tinkering and he salvaged a a cobbler's last needle, and he's you know using anything he can find. He found an air cushion sole that would absorb the impact better than the traditional leather leather sole he'd been wearing in that German military boot. And he showed the prototype to Herbert Funck, an old university friend. And this Herbert had a background in mechanical engineering.
And he helps he said, Hey, I think I can help you make this, right?
Aaron Alpeter (15:48)
Yeah, and I think it's important to remember that Germany in nineteen forty-five did not have an abundant, orderly consumer supply chain that was waiting for two consumers of foot footwear idea. materials were very scarce. The industrial infrastructure had been destroyed. consumer purchasing power was basically non existent. So they began by by leveraging surplus materials and discarded military materials, including rubber from old Luftwaffe airfields and other.
you know, military supplies to help provide the inputs for the need early on. But by 1947, Martens and Funck had moved into formal production. And the first meaningful customer base was not young men, it wasn't factory workers, it wasn't even music musicians. It was old women.
Daniel Barkin (16:34)
It's genius when you think about it, right? Like they didn't say, Hey, how can I get all these components and parts? How can I rebuild this entire country's infrastructure to make my shoe? They said, What do I have a lot of? What do I have that's good? What do I have that I can repurpose that I can use? And that's really smart, right? and and you you start talking older women,
It sounds surprising only because we're looking back, right? We we have our our current paradigm. We think Dr Martens, we think a very specific type of person wearing it. And the whole cultural image, the entire branding around it is like, wait a second, this started with just old ladies. And it it think about it, right? The proposition makes sense. The the proposition was comfort and who's walking around a lot. And a softer sole had
obvious appeal to older consumers because they had more sensitive feet. They had been on their feet longer, right? They needed something more comfortable. They needed something that was gonna get them through the day a little bit better than their prior shoe had, right?
Aaron Alpeter (17:34)
Yeah. And so, you know, you get to the late nineteen forties, nineteen fifties, and these guys developed a commercially viable German footwear business. And, you know, Dr Martens talks about how the operation was successful in less than 10 years. the product still had a geographic problem. It had some traction in Germany, but it had no pathway into the larger international footwear markets. And so by nineteen fifty-nine, the founders decided to take out some advertising.
And they started advertising these air-cushioned concepts in in trade magazines over overseas. And this is where a man in Northamptonshire, England, named Bill Griggs saw it.
Daniel Barkin (18:11)
Yeah, the Griggs family, they'd been making footwear for a generation at least, right? Since nineteen one. And by the late fifties, the business was being run by a third generation, Bill Griggs, his brother Ray and Colin, and Bill's son Max. And the family has spent nearly sixty years, making sturdy work footwear, right? What is gonna work in a in a London factory? And one of they were
I at the time, I believe, one of the most important shoe manufacturing regions in in all of Britain, right? They were supplying the labor force in this, you know, post-war industrial boom. They understood what lasts. They understood leather. They understood welting. They understood how to run a factory. And they understood what would work for the British work consumer. They knew how to make what that consumer wanted.
Aaron Alpeter (19:00)
Yeah. And so this meant that when Bill Griggs saw the advertisement, he wasn't simply looking at just another interesting foreign shoe or, you know, he was looking at this component technology that could be inserted into his existing manufacturing distribution system. And so you know, Martens and Funck developed this this cushioning concept, but it'd really be the Griggs family that turned it into a very distinct British commercial product.
And so the the family acquired the exclusive rights to manufacture and sell air cushioned soles in the in the UK. And that was kind of the beginning of of that part of the story.
Daniel Barkin (19:37)
Yeah, and they didn't just take the German sole and one of their existing boots and mash them together and say, here, we've redesigned, we have this brand new product, right? We've developed a more a a better shoe. No, they really redesigned it, right? They they altered the heel, they developed a more rounded, bulbous upper, and they added that distinctive yellow welt stitching. And they created their airware name, accompanied by the phrase with bouncing soles.
All of these small details, every single one of them, they mattered because every element people now read as Dr Marten's was part of this British translation of the original, air sole comfort shoe, if you will.
Aaron Alpeter (20:20)
Yeah. Well I think what's really interesting about this is that like you said, they didn't just take a component at it, they rebuilt and made a whole new shoe system around the the heel. And this invisible comfort technology was turned into a visible brand system as a result. if you think about this, like the the air cushioning is very difficult to see from across the room. I can't tell if you've got really comfortable soles or the standard ones. But if if you I know that that has
distinctive yellow stitching, a grooved sole edge, you know, a heel loop, all these sorts of things are really easy to QN across the room and people say, Hey, what are these? these these yellow stitched shoes are really comfortable. Not because the yellow stitched shoes, but because that's just the brand identity that's been there.
Daniel Barkin (21:02)
A literal walking billboard, if you will. Right? So before they could launch the product in mass, before they could really make this shoe available, they had to figure out how to manufacture it. And that's where NPS, the Northamptonshire Productive Society, now associated with Salvaire, enters the story. They'd been operating in Wollaston since the 19th century, and they had experience with several footwear construction methods.
And according to them, according to NPS, in 1959, it welted sample boots with air cushioned soles for the Griggs family. And the samples really helped prove that the concept could be integrated into the industrial shoe, right? MPS later produced licensed footwear sold as Dr Marten's by Solovair for 35 years. So by 1960, we have four separate contributions that are really coming together. We have Klaus Martens, who had experienced a problem and developed an air-cushioned concept, right? We have
Herbert Funck, who helped turn that prototype into a producible German business. We can make these shoes here in Germany. And you have the Griggs family who've come and says, Hey, I can sell these better. I can license these and I can redesign the product for this new and expanding market. And then you have the Northamptonshire factory manufacturing network, including NPS, who are helped converting that concept, who are bringing that all together and saying, okay, now I can I can manufacture the shoe that Klaus.
invented and and Herbert helped design for mass production and the Griggs family have license now I can now make this a repeatable manufactured part.
Aaron Alpeter (22:35)
Yeah, I it's it's interesting how it comes together. The question is like, who invented Dr Martens? And you're like, Well, I don't know. Like everybody kinda had a hand in this. I mean, one person owns the trademark, another person makes the stuff.
Daniel Barkin (22:42)
Yeah. Without it without
one of them, what is Dr Martens the brand that we know today?
Aaron Alpeter (22:48)
Absolutely not. You know, and you can argue about which which contribution was the most important and where things are. But on April first, nineteen sixty, so one April nineteen sixty we'll we're we're British again, the production line for the new eight-eyed boot began, and that date became the model number. So one, four, sixty, first April nineteen sixty, or the fourteen sixty. And so, you know, they described this in their history as like the
the boot being born that day in Woolston, England. And the 1461 was the shoe that followed the next year, again taking its name from the launch date. And and the company describes the early 1460 as roughly a two-pound work boot that was sold primarily to Britain's working class, which meant that the the product needed to be
not only affordable enough for workers to buy and but also need to be durable enough for them to use. And was quite simply, you know, an affordable work boot, but over time it became synonymous with counterculture and punk and stuff like that. And today Dr Martens sells rebellion very deliberately. Their brand language is filled with individuality, self-expression, culture resistance, and the ideas
Daniel Barkin (23:52)
Yeah.
Aaron Alpeter (23:52)
that wearers make the product their own. And so that was not part of the initial marketing brief. And so how do we get there from hey, these are comfortable factory boots for
rural workers to you know kind of s something that's synonymous with punk culture.
Daniel Barkin (24:06)
Yeah, you're a hundred percent right. Right. The beginning of this boot didn't begin at at punk shows in in dive bars. It began on the feet of workers, right? Early company product materials. you can look them up and they refer to early use among postal workers. Makes total sense, right? Who's walking around more than a postal worker, more than a factory worker, tradespeople, others looking for functional footwear? these shoes were sturdy.
They were recognizable because of that yellow welting and stitching, air cushion sole. It carried a working class Providence, a working class gravitas. People saw a person wearing these boots, they knew that person probably worked hard. That person probably was a tradesperson. And then this first generation of British skinheads. Now, when we say skinheads in Britain, entirely different connotation than skinhead.
to my American, to my US priors, they think racist or neo Nazi British skinhead culture was a lot more complicated, right? It emerged from this working class youth culture incorporated Jamaican rude boy style, ska reggae, mod fashion. That's when we really start thinking about the evolution of this skinhead culture into what became punk, right? And and these boots fit that identity. They were robust, they were working class, they looked aggressive.
They had a real, you know, they were there. They they these were not shoes that were worn in the background or underneath something. These were shoes that other people saw and you wanted other people to see. And the boot was practical, but it it in and of itself, it became this sort of form of cultural communication. You s again, you saw someone wearing that boots and you you thought something about them. and you get Pete Townshend of The Who, right? He became one of the first high-profile words to see this.
Famous rocker wearing these boots. He intentionally wore them, right? They were the who you think about this rebellious, stereotype busting rock band. And here's Pete Townshend wearing these boots, these Dr Martens. And it's this huge cultural moment for the company, right? He didn't come, he didn't become the face of the campaign by explaining, I'm wearing these shoes because they're rebellious and because they're cool. He just wore them. He just wore them and it became a part of that persona and it became a part of that.
that cultural moment.
Aaron Alpeter (26:29)
Yeah, and I think this is something that we'll see play out again and again with Dr Martens. I mean, over the following decades there are different communities that adopt the same basic product and assign different meanings to it. So, you know, punk used to be part of a deliberate rejection of polish in conventional fashion. but then you have goths that make it part of a different, darker visual language.
the the queer community uses as a tool among many to signal identity, autonomy, resistance. Grunge absorbed it into this broader rejection of of glossy commercial presentation. And of course yake musicians continue to wear it on stage. Teenagers work to school. Designers eventually pulled into these runways. At some point people who are not members of any identifiable subculture began buying it because it just looked like rebellion.
Daniel Barkin (27:12)
Right. I'm a child of the 80s and 90s. I'm sure you knew people who wore Dr Martens to school, to high school, to middle school, even.
Aaron Alpeter (27:19)
You don't mess with those guys.
Daniel Barkin (27:20)
yeah, exactly right. The Dr Marten's, they told you something. And that's really anti-fashion becomes fashion, right? The advantage of this boot was that it could carry all these different meanings. It could convey all these different messages at one time. And it was it was visually specific, right? You saw someone wearing Dr Martens, you immediately saw
thought something. And it was simple too. You didn't have to do this, you know, internal calculus into what that meant. And it gave this company this really remarkable kind of cultural flexibility. It had all these different, different cultures and these different subgroups wearing these. And the product it can mean working class in one paradigm in one environment, punk history to another, queer identity to a whole group of people. And another people like, hey, I like I just like chunky boots. I just think they look cool.
And the company, they realize they don't need to have one identity and apply that to every single person who might ever buy or wear those boots, right? It the the product identity comes not just from the boot and the marketing itself, but but but from the people wearing it.
Aaron Alpeter (28:28)
Yeah. And it's interesting because I think these things are happening and the company's just like, hey, we're selling more stuff. Like this is this is great. But eventually management begins to understand and figure out that they're not really selling just a work boot. They're selling access to this cultural vocabulary and and that begins to change the economics of the business because if the customer is is buying on utility, right? Do these boots help me, in the factory, they might buy one pair and be good.
But if the if the customer is buying an identity, then one pair may not be enough. They might that just might be the beginning of it. And that's where the relationship with durability becomes more complicated because a durable work boot is supposed to reduce how often the customer needs to return back to you. And a a shoe, a style that becomes a bit of a fashion icon creates reasons for the customer to return, even when the original product they have is perfectly functional. and so this this core tension that goes on with building a business like this where how do you grow a company around a product that's supposed to last forever?
Daniel Barkin (29:24)
Yeah, imagine, right? A simplified, highly durable product company. The company sells one boot, it's $200, it's well made, it's repairable, it's supposed to last for 10 years. Every customer tells their friend, you gotta get these pair of shoes. Most comfortable shoes, they're cool. I get so many compliments, you gotta buy these. It sounds incredible, right? I would who would wouldn't want to have that business? Who wouldn't want to run that business? And in some ways it is, right? It is incredible. You have customer trust, word of mouth.
You have pricing power, these things, they're $200 at the time. Maybe that's a lot of money, but they last they last 10 years. They last seemingly forever. but there's a problem, right? Your best customer, that person who's telling all their friends, they don't need you all that often.
Aaron Alpeter (30:09)
Yeah, that that's right. I mean, the person who's the most satisfied with the product may also be the person who's least likely to replace it with next year's model. I mean, you kind of see this with iPhones where people are like, it's good enough. Like I, you know, I it it's fine. And so the company has a couple of options that they that they can pull on to show some growth. They can try to find more first-time customers by
entering new countries or raising prices or moving into adjacent categories, or they can start to sell different versions of it. Maybe people have different color preferences or things like that. Or they begin to shorten the shelf life and increase the replacement rate. And that last option is the one that it's the most cynical and that's the one we kind of all point to, but it's not the only path.
Daniel Barkin (30:51)
Yeah, luckily Dr Martens was able to follow a fashion path, right? The black that black fourteen sixty can last forever, for years, maybe not forever, but for a real long time. But the customer can also buy a cherry red pair, a platform pair, a floral pair, a soft leather pair, a loafer, a sandal. I you know me. You know I like matching my shirt to my shoes, obviously. The and so this is really what Dr Martens is speaking. I'm clearly a very, very fashionable man. And that growth model
Is what that customer is is who Dr Martens began to speak to. The growth model didn't require a single boot to disintegrate. I'm not gonna sell you a a shoe that is gonna fall apart in a couple years, so you buy another one. I'm gonna say these shoes have so much value, you need more than one pair. You want you don't need more than one pair, you want more than one pair. And you want to tell your friends about all those other pairs you have. And it's an interesting irony, right? The the longer lasting
Or more durable something is, the more the company needs to push consumption in order to keep that business growing. Right. And you need people to buy more shoes.
Aaron Alpeter (31:58)
Yeah. That that is a really interesting irony. It kind of reminds me of the issues that a lot of mattress companies have. Because you may spend a lot of time like identifying the right customer, getting the right copy, convincing them to buy. And then what, you you wait for ten years before they need to replace their next mattress. I that that's kind of a difficult business. It's nice 'cause you're charging a lot, but there's a point there where if you've serviced everybody, you're like, Well, now what?
Daniel Barkin (32:20)
Right. I mean, I have more than one bed, obviously, because that's that's what it is. No, I I don't. But that creativity, it's creativity, really, right? How do I drive consumption and and how do I drive repeat purchases when the original hasn't failed or hasn't worn out or or doesn't need to be replaced necessarily? How can I drive consumption and create more it creates an inventory issue, right? Now all of a sudden I'm not making one shoe.
That I know I need to replace every 10 years. I'm creating multiple different colors, silhouettes, formats, a seasonality around it, right? If I'm selling a sandal, maybe that sandal sells better in the summer than it does in the winter. And footwear inventory is especially interesting because it's not just one skew or one style or one color, dozens of sizes. And that's just talking about maybe men or women or European or yours. Think about the entire global footwear.
category, different sizes, different sizing schemes and methods. And if you're wrong about that size curve, right? If if feet are bigger or smaller than you had originally thought or you had manufactured to to a certain market, you're stuck with inventory that's not moving. And it's a large amount of commercially awkward stock. What do I do with a shoe that's maybe gone out of season or is a size that people aren't buying?
And so while the product might look successful in aggregate, you really have to look at the broader ecosystem of that shoe. Are they being marked down? Are they being sold at discount retailers? Are they being sold in secondhand stores, things like that? And that transition from one iconic boot to a full fashion assortment turns a stable business, a stable manufacturing environment, a stable inventory management.
into really a complicated forecasting system.
Aaron Alpeter (34:19)
Yeah, well, and then that complexity gets even more layered on when you start adding in culture and cultural changes and stuff like that. Because
Daniel Barkin (34:25)
Action trends, right?
Aaron Alpeter (34:27)
yeah, I mean your your factory, your store network, your inventory position probably can't adapt as quickly as fashion can. And this is exactly what Dr Marten started to discover at the beginning of the two thousands. And so the company had spent decades benefiting from this cultural relevance around punk and rebellion and stuff like that.
But then their relevance cooled and demand fell and it was left with this really expensive British manufacturing system that was built for a much larger business than it actually was.
Daniel Barkin (34:53)
Yeah, and I'm sure you saw it. I saw it by the early 2000s, right? Fewer people are wearing Dr Martens. Fewer people are walking around from this dramatic 90s peak where it's it's seemingly everyone had a had a pair of of docks and and they were overexposed, to be to be totally honest. The fashion had moved on. this large domestic manufacturing footprint and cost structure was increasingly difficult to support as fashions and trends changed.
And in two thousand three, Dr Martens they closed most of its British production and moved the majority overseas, overseas to China and Thailand. Five factories closed, more than a thousand jobs were reportedly lost, and the company came close to bankruptcy.
Aaron Alpeter (35:37)
You're right. This was like a real near failure moment. And and it's it's one that has major implications for the company going forward because this outsourcing decision not only changed their cost base, but also changed the relationship between the brand and the product. Because when the production moves, you lose the tacit knowledge, you lose the tribal knowledge, the the speed of communication between design and manufacturing. You lose the workers who know what a defect looks like before it even becomes measurable. And so there's all these sorts of quality specs that
that yeah the spec says this, but we actually know that it's interpreted this way and like all of that goes away. And so, you know, I I think at the same time, if the company had refused to change, we might be describing Dr Marten's as a dead British trademark that was occasionally revived under a new license.
Daniel Barkin (36:24)
Yeah, it's possible, but I I wanna I wanna challenge that binary, right? The choice the choice wasn't necessarily on one side preserve every British factory exactly as is and go bankrupt, go out of business. Or option B to move almost everything abroad and survive. were there were there other things that could have been done? What about intermediate possibilities, right? Could we have a smaller domestic footprint?
Could we be more disciplined in our product segmentation? Could we have fewer SKUs? could we have invested earlier in international demand? Could we have utilized our factory differently? Could we have installed or implemented automation in a different way? I think we should like not every choice, not every decision point is a crisis or is dictated by a crisis. I think there's really these things happen over time, often, right? More more often than not, these things happen over time.
And if you can react in time and be proactive to the changing demographics, changing trends, changing manufacturing paradigm, if you will, then I think it gives you more flexibility, more options, and gets you out of this binary serve like stay and die or move and survive framework.
Aaron Alpeter (37:46)
Yeah, and I think you're you're you're right. And I think they recognize that too, because eventually they brought back some limited production at a factory in England at Cobbs Lane. And they probably recognized that the domestic line could perform several functions, like preserving the skills that I mentioned, you know, you utilizing the equipment that already been paid for, giving space for them to have like a premium product here, right? Made in the UK type of of branding.
but also probably, you know, retained and improved some of their internal development capabilities. And so it it allowed them to continue to monetize a part of their history that the global line can't claim in the same way. You can say these were designed and maybe manufactured in the UK, whereas if it's just all coming out of Thailand, you you gotta say, like, yeah, these are kind of British shoes.
Daniel Barkin (38:32)
Yeah. Yeah, and it means British manufacturing didn't stop. It stopped being the operating center. It became a point of differentiation. It changed from this is where all Dr Martens are made to Hey, I can if I if I want to, and that's something that's important to me, and there's some identity I derive from it, I can get a premium pair of Dr Martens made in in the UK.
Or I can get my everyday pair of Dr Martens that might be made in a factory overseas.
Aaron Alpeter (39:07)
to how much that matters to the average consumer, I don't know, but I'm sure like there there is something there for some people that look at it. you know what's interesting is that their their global production system continued to evolve and so by twenty twenty five it was reported that approximately sixty two percent of their footwear was produced in Vietnam and thirty-one percent was produced in Laos.
And so you think about like 93% is concentrated in just two neighboring Southeast Asian countries. And you know, this this UK factor in Northamptonshire was really just a small percentage of the total volume. And so it really does feel like a bit more of a marketing play than anything else.
Daniel Barkin (39:43)
Yeah, absolutely. Okay. So we've talked a bit about the company history and their cultural relevance leading up to that decision to to outsource, if not entirely, ninety three percent almost entirely. So what impact has there been on on that perception? Do customers notice can they tell if a shoe's made in Vietnam or Laos or if a shoe is made in that Northamptonshire factory?
Aaron Alpeter (40:08)
You know, it's it's really a nuanced answer and it's it's pretty interesting. So if we take just the basic fourteen sixty and work from the outside inward, you have the leather upper, which is is the most visible part and the thing that consumers are most likely to evaluate. But but leather is not like a single material grade. It varies based on the animal source, the hide section, the thickness, the coating, the tannage, all those sorts of things.
Daniel Barkin (40:33)
We think about leather and it's just leather. It's all leather to you. But how much can you tell by touching it, by feeling it, by looking at the smell of that leather, right? And and Dr Marten's leather, for example, has a very recognizable look. It's smooth, it's relatively stiff when you first buy it, and it's got that really heavily finished look to it and feel to it. And it it takes time to break in. And some some people love that, right? They love being able to personally mold that shoe molds around them. That leather.
warms to their foot, molds to their foot, and other customers have that break in period is evidence that that shoe started out as uncomfortable. That's not what they're looking for. They they need a shoe to be comfortable out of the box.
Aaron Alpeter (41:17)
Yeah. Well, it goes back to what we're talking about earlier, where there's just this conflict between the immediate and the long-term product experience. I mean, you said that stiffer material might be better structured but cause these pain points, and softer may feel better immediately. And and the company, interestingly enough, now offers both. So they've got a softer variation that's explicitly positioned around comfort,
Daniel Barkin (41:35)
Interested.
Aaron Alpeter (41:36)
around first wear.
which is response to kind of these modern consumer expectations. So they're still trying to figure this out and say, you know, we're kinda known as this durable company, but maybe that's not what the market wants anymore. Maybe we gotta do something different.
Daniel Barkin (41:49)
Yeah. And that's just the leather, right? We haven't even gotten into the sole. And the Dr Marten sole, it's distinctive, right? It's Dr Marten's is traditionally described as this welted footwear. But the construction is not identical to other every every other conventional Goodyear welted shoe. The welt and PVC outsole, they're fused with heat. And they create this characteristic the way the sole attaches.
To the rest of the shoe. And that yellow stitching is part of that visual identity. And if you resole the boot, it requires specialized equipment, it requires specialized material. And you have to know, you have to have worked on a Dr Marten shoe before to do it. It's not resold like every other shoe, which means welted in the traditional sense doesn't necessarily mean every cobbler, every shoe repair person can easily resole this boot.
Aaron Alpeter (42:47)
Absolutely. And and again, this repairability exists on a spectrum. And you know, theoretical repairability is not the same as practical repairability. And so only a small number of of specialists can actually perform the work, even if you know the components are difficult to obtain, but those labor costs will really approach the replacement costs like like my shoes I had earlier.
The shoe might be technically repairable, but economically disposable for most consumers.
Daniel Barkin (43:11)
Right. And it's why that visual stitching, that that yellow stitching is so important. Customers understand stitching. They understand what they can see. They might not know how that stitch necessarily connects, how the sole is attached to the upper, or what materials are inside of it or sit underneath it, but they know the stitching. It communicates something. It communicates information.
The company knows materials, they know specifications, they know tolerances, they have test data. The consumer knows how boots look, how it feels in the store, what happened to their previous pair. That brand, that stitching fills the information.
Aaron Alpeter (43:49)
Yeah, and and that that reputation is what makes things economically valuable. So the you know, they spent
Daniel Barkin (43:54)
Absolutely.
Aaron Alpeter (43:55)
decades teaching consumers to think thick sole plus yellow stitch plus leathered upper represents toughness. And and that means that they're kind of still barring against this historical evidence. And so that's where the the vintage comparisons become more difficult because people will say, my old Dr Martens lasted 15 years, but my new loans lasted 18 months. And that's just a very difficult thing because you know, we have the survivor bias issue where
The vintage pairs that are still in circulation are the ones that survived, right? The old products that failed are not being sold online to say, hey, these were these were crappy Dr Martens that you know from 30 years ago. And who knows? Like these ones that are vintage could have sat in someone's closet for 20 years, right? They could have worn them two times.
Daniel Barkin (44:35)
Totally.
Aaron Alpeter (44:36)
You know, it's just it's a the survivor bias is very difficult because it's a convenient way for people to dismiss every other quality component. but you can have
you know, vintage stuff that failed early on. You could have stuff now that it's just new, but it's gonna last forever. So it's it's very difficult. But the company's gotta look at return rates and reviews and all this sort of thing to get a sense of where the arrow is pointing.
Daniel Barkin (44:58)
Yeah, you can't just say all new Dr Martens are worse. That's not enough information. it's that that false dichotomy is that binary choice that we talked about from a company perspective, from a consumer perspective, you can't just say all new Dr Martens are worse. You also can't just say there's been no change because the silhouette's the same. It's the same boot. It looks the same. Nothing's changed. The truth is that.
Geography has changed, scale has changed, ownership has changed, and the impact to consumers has also changed. And it would be surprising, right? It would be surprising if the quality system, if the the quality of the shoe, that exact shoe, was completely identical through all those transitions, through all those different iterations and through the group the growth of the company. And there's one more comparison that makes the whole issue more interesting, and that's Solovair.
Because MTS kept making footwear in Northamptonshire after its Dr Marten's licensing ended. It it kept a factory, it had a manufacturing story, it didn't maintain that global trademark, but they were still making shoes.
Aaron Alpeter (46:07)
Yeah. And this is so fascinating because it's a a very clean example of enterprise value creation. Because Solivair retained the British production, the skilled workforce, a historic factory, all this manufacturing cotton where they say, We've been making shoes since nineteen one or or before that. and Dr Martens, the company retained the trademark, the yellow stitches, their stores and their sales channels.
Daniel Barkin (46:31)
So Aaron, who owns the authenticity? What's a how do I know that I have an authentic Dr Martens? Is it a Dr Martens or is it a Solovair?
Aaron Alpeter (46:40)
I mean it's a i it depends on how you're gonna measure. I mean, the Solar can credibly claim continuity of place in production. Dr Martens can claim, continuity of trademark and silhouette and let inch, but economically the market assigns far more value to the entity that controls the consumer demand, which would be Dr Martens, than it does the actual manufacturer.
Daniel Barkin (46:58)
It's interesting. Why should consumers care who owns the trademark? Isn't the product itself more val like the the thing on their foot more valuable than who owns the intellectual property of the shoe? And it's it's it's obvious and it's a little uncomfortable, right? The factory can preserve the process and do all that work. The trademark can preserve the memory and the brand story and even much more than the manufacturing, because number one, it manufacturing
without demand becomes this low margin service that's provided. And consumers don't necessarily have a a frame of reference to think about when they think about a shoe or or a product. Where's that made? How is it made? To to them, they have this tangible product that is telling that story. And a supplier can possess extraordinary capability and still capture less value than the brand that controls the customer relationship, that trademark.
Aaron Alpeter (47:54)
Yeah. the world is unfair, is I guess what it comes down to, especially being supply chain guys, like we're doing all the work here. And I remember when I worked in the factory, there was a lot of pride in in making the products that we were making. And you know, people would say, Hey, I I did this and this is what I'm doing. And
Daniel Barkin (48:06)
Yeah. They tell their friends this is what we made today.
Aaron Alpeter (48:10)
and and yet there are always questions about like, Hey, we should we should own some of this company or we should be paid more because we're doing all the work and that's just not how things work unfortunately.
And you know, by the early 2010s, Dr Martens had survived their manufacturing crisis and they had started to re-establish themselves with a little bit of cultural momentum. but then private equity interests the story. And Premira agreed to acquire the business from the Griggs family for $300 million in 2013. And the transaction completed in January 2014. So this Griggs family had had it since 1959, all the way to 2013. And from Premiere's perspective, they felt that.
they were buying a globally recognized brand or globally recognized symbol that was underdeveloped as a modern consumer platform. And so that meant that the brand was famous, but the business was not capturing all the value associated with that, with that fame. And that was really the thesis behind the acquisition.
Daniel Barkin (49:04)
Yeah, they saw that gap and they saw that market opportunity. And it it probably that thesis probably included several levers, right? You have e-commerce. The company had a enormous awareness, but relatively little digital penetration. I don't know. Yeah, it was 2013,
Aaron Alpeter (49:19)
To be fair, it was twenty thirteen.
Daniel Barkin (49:22)
right? and they had owned retail. They the stores allow the company to control presentation. You can go into a Dr Marten store and they
have all that customer data and they can carry a broad assortment and and they can capture that retail margin. There's international expansion. These boots were culturally recognized in markets where the company could still improve distribution. I think also there there was value in that international expansion in wearing this iconic British brand and and what that that message that communicated in your in your home, in your hometown, in your home country.
And then there's product expansion, right? We've got e-commerce, we've got owned retail, international expansion. There's product expansion. We could add additional types of boots or shoes or sandals, platforms, collaborations with bands or other brands, accessories, and then really professionalizing all those those levers together. A company that is moving from a family run business to
An institutional business that knows how to scale and needs systems for planning, reporting, talent management, digital marketing, inventory management, capital allocation, production management, all these things that go into running and scaling a business that maybe a family-run business is less equipped or has less institutional knowledge or resources to do. private equity is able to come in and say, hey, we can.
solve a lot of these problems together.
Aaron Alpeter (50:58)
Yeah, and and to their credit, they changed the company in a big way. They w when they closed the deal, they basically said that they were transforming the company from a manufacturing oriented wholesale business into a multi channel, consumer first, digitally led company, which sounds very nice to say at the time.
But between 2014 and 2020, they increased revenue from roughly 209 million pounds to 672 million pounds. And e-commerce increased from roughly
Daniel Barkin (51:24)
Got it.
Aaron Alpeter (51:25)
17% of revenue to 20%. And from a headcount point of view, they they grew from 758 people to 2,288.
Daniel Barkin (51:35)
That's that's a lot of people.
it's disingenuous to say that Premira invented the cultural relevance or reinvented rather the cultural relevance of Dr Martens. That that's that's unfair to the Griggs family and to Dr Martens as a whole. But it is fair to say that they really did a great job and did a better job than anyone had done before of creating a system to monetize that cultural relevance.
And eventually we're going to need a liquidity event, which happens finally in January of 2021. So Dr Marten's lists in London at 370 pence per share, implying a market cap of approximately 3.7 billion pounds. this offering is heavily oversubscribed, and existing shareholders sold a substantial amount of stock.
But Primera retained a large position after the listing, but it had already created considerable liquidity throughout the process.
Aaron Alpeter (52:31)
Yeah. So I just want to pause and like focus in on this value expansion because they they paid around three hundred million pounds in twenty fourteen and the IPO is approximately three point seven billion pounds at IPO. And these are not directly comparable without adjusting for like the debt or the capital structure or the the share sales, et cetera. But the direction is pretty unmistakable. The market believed Pamira had turned an under monetized heritage business into
a global growth asset. Like it was it was humming at this point.
Daniel Barkin (53:01)
And we're not talking d decades or generations. What is it? Seven, seven, eight years?
Yeah. So what exactly did the public market think it was buying? Was it a boot company? Were they investing in this in the shoe? Or was it buying a consumer acquisition machine with a famous boot attached to it? What was really important?
Aaron Alpeter (53:23)
Yeah, that's a good question. I think it is 100% the second. I mean, at the time, management continued to talk about strong revenue growth, e-commerce expansion, higher direct-to-consumer mix. their eBIT margins were about 30% over the the medium term.
And so investors are not paying 3.7 billion because the 1460 was going to you know maintain its existing niche. They were paying for that penetration, that cachet that existed there. And the the public market growth case looked really compelling. And Dr Martens had this global recognition, they had international white space and all this cultural relevance really across generations at this point.
Daniel Barkin (53:59)
Yeah, but correct me if I'm wrong, that still has to pass through an operating system and eventually that operating system fails in the United States. So one of the most visible problems from that transition is the company's main west coast distribution operation transitioned from Portland to Los Angeles. And inventory started arriving earlier than expected, and the new facility was not able to process that volume. They weren't able to get that received.
process, turn away, and it created issues around case fill, cost management, excess inventory. Inventory showing up sooner than they've the shelves are empty. And that has real implications on cash flow, on on capital, on the financial expectations.
Aaron Alpeter (54:49)
Yeah, well it's just people would will blame supply chain problems, right? Like that's just what everybody did in in
Daniel Barkin (54:52)
Always. yeah.
Aaron Alpeter (54:54)
in twenty one.
Daniel Barkin (54:56)
Yeah, it's not it's not simply a late container though, right? It's not it's it's supply chain problems, but it's it's broader than that. It's a late container, we have too much product, we have a facility that isn't prepared to handle that, and it's a it's a cycle, right? It's a vicious this vicious feedback loop. Wholesale customers don't receive their orders when they expect, and they become less confident. At the same time.
The US is also experiencing weaker demand and wholesale partners start reducing their orders. So they're not getting the orders on time. The demand's not there. They reduced their orders. Now Dr Martens is sitting here with a warehouse full of of inventory. and tough decisions to make. wouldn't it be accurate to say that the that that the LA facility single handedly destroyed
this public company thesis or was there more to it?
Aaron Alpeter (55:45)
You know, I I I think they revealed a lot of stuff. Like clearly they sold a better story than they were able to execute on, but I'd say that Dr Marx is still working through a lot of stuff. I mean, revenue reached around a billion pounds in fiscal 2023, but then it started to decline pretty sharply. it fell to 877 million in fiscal twenty-four, then seven hundred and eighty-eight in fiscal twenty-five. and and the number of shoes that they sold fell from 14.1 million.
In 2022 to 10.2 million in fiscal 2026, which ends in in March of the year. So I mean, this is not a small adjustment. This is a company selling
Daniel Barkin (56:21)
Yeah.
Aaron Alpeter (56:22)
nearly 4 million viewer pairs than it had several years ago. And the market started to reclassify the business. I mean, and at IPO, it was treated as again this durable global growth company, but after repeated warnings and execution issues, it began to treat be treated more as a turnaround.
Daniel Barkin (56:39)
Yeah, so what I'm hearing and what I'm learning is durable brand does not automatically equal durable earnings, especially as market shift and and things change over time. And I think it's interesting, their current CEO has really framed this strategic shift in a in a very specific way. The old model was described as channel first. Build it and they will come, right? This new model is consumer first.
Earn the right with each wearer. Get people in those shoes and and they will earn you will earn their trust and earn their business.
Aaron Alpeter (57:14)
Yeah, it kind of suggests that the prior organization or the the prior regime before the IPO had become too focused on pushing product through channels. And so, you know, if if the company believed that the brand was strong enough, it could just create the inventory, place it in the stores or wholesale accounts, and the demand would just show up. And this new strategy, it's
Daniel Barkin (57:31)
Yeah, it'll sell. We'll sell them. We'll figure it out.
Aaron Alpeter (57:33)
yeah, yeah, we'll mark down worst case scenario. But this new strategy you're talking about really reverses that. It's all about creating that stronger consumer demand first and then allowing the channels to pull that demand through.
Daniel Barkin (57:45)
Yeah, so in fiscal twenty twenty-six, the company still reported lower revenue of roughly seven hundred and sixty-five million pounds, but adjusted EBIT increased to 79.3 million pounds and gross margin improved over 66%, 66.2%.
2026 really shows that improving profit quality, but revenue and pair volume. So number of shoes that are turning are are still actually lower. the company's able to demonstrate that it can cut costs and improve margin, but ultimately it still needs to restore durable full price growth. We still need to get people to buy shoes at their MSRP.
And perhaps the most interesting test really is gonna be whether the brand can make that durability, of these boots economically visible again, especially right now, right? It it's not merely language, it's not merely saying our shoes are gonna last longer than their shoes. It's really how can we build an operating system which brings us, which allows our shoes to be repairable and durable and long-lasting again.
Aaron Alpeter (58:55)
Yeah, and I think that repair and the ability to repair something is where the durability claim becomes tangible for most people. Because it's it's much more difficult than just saying a product is built to last. A very serious repair system requires more than a page and a website. You've got to have a way to intake the shoes, inspect them, you've got to have a clear list of eligible repairs, replacement parts. You have to manage the
customer communication with deciding, you know, is this good or is it not? And what do you do with with shoes that are too damaged to repair? And so it'll be interesting to see how much they lean into this. they've they've had some stuff recently where they're kind of talking about, you know, hey, we're going back to durable, you can repair these things, but it it's still a f a very niche element from my understanding.
Daniel Barkin (59:38)
Yeah, you need an infrastructure, but you also need reliable and repeatable infrastructure. And they currently offer it. It's called the UK Repair Service, the Boot Repair Company. And the service what have you send them their boots? They cover welted and non-welted footwear, sandals, bags, accessories, and any Dr Marten product that that is applicable. And the company says they repair it using original components and authorized alternatives only. It's meaningful because it goes beyond just taking it to your your local
Pobler, local shoe repair store, you're sending it to Dr Marten's to this boot repair company to be repaired with authentic, authentic Dr Marten parts. And in the United States States, we actually have the reware program. It's a little bit different. What they do is they restore and resell return, damaged, or defective inventory. The products are they they're they're received, they're inspected, they're cleaned, they're repaired where they need to be, and they're resold.
they're resold as sort of reware certified Dr Marten
Aaron Alpeter (1:00:41)
Yeah, refurbished and whatnot. You know, it's kind of interesting because a factory will make a car and then you take the car back to either a dealership mechanic or your local mechanic. And you know, sometimes the thought is if I go back to the authorized dealer, I'm getting a better deal, or you know, they're the ones that can help work on warranty parts. And so maybe, who knows, in the future, maybe we'll have a a future dealership network of of shoe repair stores that we'll go back to and
they'll be authorized for certain brands. That'd that'd be fun.
Daniel Barkin (1:01:11)
Yeah, and it I wonder if if it will increase future purchases almost. It sounds contradictory almost, right? If I if I think my shoes can be repaired, am I gonna buy more shoes? But really what I think is if the company will support the product, if they'll stand by the product, the if they'll repair the product, I'll I'm probably a lot gonna be a lot more comfortable buying more of that brand's products, more of that company's shoes, if I know they're gonna stand by it and and fix them.
Aaron Alpeter (1:01:39)
Yeah. Yeah, I think that's a good point because like repair does not mean anti-growth. I mean, when somebody thinks of something that's gonna last a long time and it's durable, you know, the initial thought is I'm not gonna be able to have as many opportunities to sell to customer. But it it can be something that builds that trust in the system that you're talking about.
Daniel Barkin (1:01:56)
Yeah, I don't I don't know that we that we have the answer to how large that repair operation is, but it to me it that's that's less relevant. It it's much more important to understand it as evidence of intent and strategic capability or potential strategic capability. Dr Martens can make it more meaningful and they can scale it over time. But what it does is it gives the company a way to reconnect.
The symbol of that symbol of durability to a real post-purchase promise, a real something they're giving to the customer. And the question then becomes is does repair remain a small heritage program where customers are really only sending in their most beloved fit to their foot Dr Marten? Or does it become part of a broader cost operating model where it really, like you mentioned, a whole network of Dr Marten's authorized repair shops where
I can take any pair of Dr Martens and any pair of shoes and have it fixed and just build out my collection of Dr Martens.
Aaron Alpeter (1:03:00)
Yeah, for sure. Yeah, and I think it's it's the reality. It's like this public company is trying to figure out what to do because their valuation today is still well below their IPO level. And, we like to talk about where who might buy a company and where we where we exit. And I think it's important to say we don't have any evidence that the company's exploring a sale process, but they're an obvious potential strategic asset because the
trademark is still globally recognized, even though the the public market performance has has damaged the luster of that a little bit.
Daniel Barkin (1:03:31)
So what exactly would a potential buyer if there were if if they were exploring a sale, what what would a buyer actually be purchasing?
Aaron Alpeter (1:03:39)
Well, I mean you obviously got the trademark, you've got the account of products, they've got sixty years of cultural history and a pretty sizable wholesale and DVC relationship. I think they have about 240 stores that they're directly operating around the world. but there's also a lot of risk. I mean they they are heavily dependent on their iconic styles. And and because of that, they are exposed to
fashion cyclicity and of there's all these things could be difficult and there's still a few parties that might be interested in this. I think the first one would be like a global footwear or lifestyle group. So VF Corporation is is the obvious one. They own Timberlands and Dickies and so they they really understand workwear and like the lifestyle
Daniel Barkin (1:04:20)
well.
Aaron Alpeter (1:04:21)
of of blue collar if you want to call it that. And so this might be like another globally recognized brand that fits into that portfolio.
But I think the challenge there is that there could be too much overlap with with Timberland. Yeah.
Daniel Barkin (1:04:32)
Yeah. Yeah. What
about what about Deckers or or Wolverine Worldwide?
Aaron Alpeter (1:04:38)
Yeah. So I think those are the other two that come to mind. Deckers has a really interesting history of of brand stewardship. So we talked up talked about them on the Hoka episode. But they own Ug and Hoka and a lot of others. And so they know how to scale recognizable footwear. and this would allow them to diversify into like a unique portfolio position. but they're much more mature and and kind of operationally troubled than the typical kind of high growth asset that.
that Deckers usually goes after and so that they might be off for that one.
Daniel Barkin (1:05:09)
Yeah. And talk to me about authentic brand groups.
Aaron Alpeter (1:05:14)
Yeah, so ABG definitely knows how to like monetize famous intellectual properties. So they this could be a trademark that helps them expand into licensing, but it it's probably the wrong model for the current moment as as the turnaround of DocMarns is gonna require some really tight product control, tighter distribution. I think aggressive licensing could extract value while weakening the product over time.
Daniel Barkin (1:05:38)
Yeah, it would almost take that durability issue to the complete extreme, the absolute extreme endpoint where the trademark would become even more valuable as an image while becoming even further separated from the actual product or product system, right?
Aaron Alpeter (1:05:54)
Yeah. Could you imagine if they like Dr Marten's paper towels or something? Where it's just like, these are tough, these are these are the rebellious paper towels.
Daniel Barkin (1:06:02)
I think there are some dive bars that would really be into that. I think there would be yeah. I think there's value there.
Aaron Alpeter (1:06:09)
Yeah. I think just to round out the acquisition thing, I I think the other obvious piece would be another private equity buyer. you know, the the thought here would be that this is operating well below its IPO peak. the brand is still healthy, but you know, the the turnarounds are gonna require a lot of patient operational work. I think that the difficulty with the private equity buyer is that most of the levers that they would typically pull, Permira already pulled them. And so they've got kind of a limited runway
Daniel Barkin (1:06:36)
Not as obvious anymore.
Aaron Alpeter (1:06:37)
to push on.
Daniel Barkin (1:06:38)
Yeah. Yeah. I think that's that's super interesting. what are some of the major lessons that you've learned or that listeners should take away. what stuck out with you the most?
Aaron Alpeter (1:06:48)
Yeah, I think for me it's really this conversation around durability. the fact that durability is a choice and it's a system and it touches almost every aspect of the business of the product. when you decide that you're gonna make something that's going to be durable, that impacts the architecture of the product, the material selection, your suppliers. And theoretically, a repairable boot without economically viable repair pathway is not fully repairable for the ordinary customer. And so, you know, you see about people who
You know, we'll spend two million dollars restoring a home that you know anybody else would have knocked down. Like you don't want that in your footwear. You need something that you know the price of fixing it is is going to go through there. And so I think the important lesson to learn as a founder is that the company needs to identify which manufacturing capabilities are simply activities and which are strategic knowledge that goes into that durability story. Because if you outsource
Daniel Barkin (1:07:39)
What provides value?
Aaron Alpeter (1:07:41)
Yeah, i if you outsource everything, you kind of need deliberate systems to retain that engineering, the quality standard, that the other just tribal knowledge that's there. otherwise you end up becoming a marketing organization that knows less and less about the physical product that that consumers have and and the reason why they trust it.
Daniel Barkin (1:08:01)
I I think to me the the thing that stuck out the most was that hero product does not necessarily equal a growth plan, right? It might give you recognition, it might give you reputation, but you still need to generate demand, you still need to manage your inventory and discipline around that inventory management. You still need a channel strategy, you need healthy unit economics, right? And durable brands can have fragile earnings. I think.
it it's common among founders to believe that their brand strength, their hero product will protect them from operating weakness. That's not always true, right? we could we could list a long list of of brands that have fallen into that trap. But a really strong brand can buy time and can buy forgiveness with consumers. They can improve conversion. They it can't overcome bad forecasting, right? It can't overcome late deliveries.
It can't overcome too much channel conflict. All those things are are a perfect storm that that really can can doom a company.
Aaron Alpeter (1:09:05)
Yeah, so do you think Dr Martens is actually durable?
Daniel Barkin (1:09:09)
I think so. I think so. I think some products will be and some customers will wear them for many for many years and other customers will experience a failure or something will go wrong and other customers might that that might be their intended use. They wanna buy a they wanna buy a shoe, they wanna rotate frequently. It's it's like people leasing a car, they want a new car every couple of years, versus people who buy a car and wanna maintain that car forever. I think over the last eighty years, almost everything
around this recognizable object has changed at least once, right? The manufacturing geography, ownership, assortment, consumer sentiment, trends, fashion, is so being so cyclical. one thing has not changed, and that's the visual identity of a Dr Martens boot. And it's remained remarkably stable. I I think that that that to me is is really really tells part of the story is that it's just been remarkably stable. You see a Dr Martens, you know it's a Dr Martens.
Aaron Alpeter (1:10:08)
Yeah, and that stability is always where that quality conversation comes back because the boot looks like the same thing that consumers have always seen. And so they they expect it to be the same. But like you said, the operating system is is completely different. And so I I think that the next phase of the company is going to prove is going to depend on if they can prove that there's still a meaningful operating promise underneath that that identity, despite everything that's changed or will change.
Daniel Barkin (1:10:35)
Yeah, and I think that really gets to the broader answer, right? Why do shoes not last the way we expect them to last? Did the indust the the industry didn't forget how to make durable footwear. It learned to optimize for different things. Immediate comfort, lower weight, faster manufacturing. They were, you know, part of it is really shue manufacturers meeting consumers where they were.
Aaron Alpeter (1:10:58)
Yeah. And I think that's what I've I've loved about this this episode because Dr Martens kind of contains both systems. You've the old promise where one pair could become part of your identity and it it has that identity because you wear it forever. It's just how you're seeing. but then the modern growth model needs the identity support many purchases. And so the company didn't create the contradiction, but there's probably no other company that more clearly lives in that contradiction more than the Dr Marten. So Daniel, this has been fantastic. Thank you so much for joining on and
Thank you everybody for joining this episode of E-Commerce on Tap. We hope you you hope you'll go out and get a pair of Dr Martens. Why not? I mean, who knows? It might last for the next 20 years.
Daniel Barkin (1:11:33)
get a pair Dr Martens, get up, walk around in your Dr Martens
while you're listening to e commerce on tap. I think it's a perfect, it it matches up perfectly.
Aaron Alpeter (1:11:41)
That's that's great. All right, guys. Till next time, we'll see you on the next episode.