'Birkenstock' Joins The Luxury Shoe Family With New Owners
Private equity firm L Catterton, has bought a majority stake in famed footwear brand Birkenstock. Now, the comfortable German company is looking at what its next steps might be.
On Friday L Catterton affiliates, including Bernard Arnault's family holding fund Financiere Agache, declared in a statement that they will be investing in the maker of the iconic flat sandals. Arnault is richest person in Europe, worth an estimated $117 billion according to the Bloomberg Billionaires Index. While no details have been released regarding the purchase price, analysts have set the probable number at $4.9 Billion.
"In L Catterton and Financière Agache we have found not just shareholders, but also partners for achieving our global growth ambitions," said Birkenstock CEO Oliver Reichert. Oliver is one of the first leaders in the company who is not from within the Birkenstock family.
This new move appears to place Birkenstock in the luxury league, as a buy-in of such high interest from an LVMH-backed company points in that direction. Can the notoriously casual Birkenstock brand make the transition? As the old saying goes, if the shoe fits, wear it.
The family seems to have similar visions as brothers Christian and Alex Birkenstock released a statement that gives that impression. In it, they stated, "For the next 250 years we need partners sharing the same strategic and long-term vision as the Birkenstock family."
Global dominance isn't off the table. In fact, this move seems to be a step in that direction. Arnault has experience with bringing his brands to Asia. Birkenstock has expressed interest in using their investment to help expansion into China and India. The company currently employs more than 4,300 people from around the world.
"We will get excellent market access and contacts in Asia through the new co-owners, and can push on with our growth at an accelerated pace," Birkenstock chief executive Oliver Reichert told business weekly Handelsblatt.
Just like a good pair of sandals, it feels like a matching pair.
Birkenstock was founded back in 1774 by cobbler Johann Adam Birkenstock. In 1925, they set up their first factory. With that rich history, Birkenstock is a family business and will remain partly owned by its founder's descendants, as the brothers will oversee the manufacture of its products in Germany.
With a spiked interest in comfortable footwear during the coronavirus pandemic, companies like Doc Marten, Crocs, and Ugg have all been experiencing jumps in their sales numbers. Birkenstock saw its own sales increased by 11% in 2019, In 2020, they've watched it surged even higher.
What does the future hold for Birkenstock? The sky is apparently the limit and along with their new partner, their shoes were made for walking and this footwear can go anywhere.
Sources: CNN, France 24, The Guardian
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