Birkenstock’s buyout might well bring it closer to the white-hot center of luxury fashion.
The sandal maker, which has been testing the deal market, is in exclusive talks with private equity giant L Catterton and looking to close a deal in March, WWD has learned.
And LVMH Moët Hennessy Louis Vuitton — already linked to the deal with a stake in L Catterton — could jump into the transaction directly with a relatively small coinvestment in Birkenstock that would give the luxury giant direct ties to Germany’s largest footwear manufacturer.
While it is not clear what value the deal will put on Birkenstock, when word that private equity players CVC and Permira were looking at the brand surfaced last month, the price was said to be roughly 4 billion euros.
A spokeswoman for L Catterton declined to comment and a spokesman for LVMH did not immediately comment.
If the deal goes through and LVMH does invest, it would bring the luxury giant and L Catterton that much closer.
The Bernard Arnault-led LVMH and his family holding company Groupe Arnault joined forces with the partners at Catterton to form L Catterton in 2016. The Greenwich, Conn.-based investment firm now has more than $22 billion under management and bills itself as the world’s leading consumer growth investor. The group holds majority investments in a broad range of companies, including Everlane, Gentle Monster, Ba&sh, and minority stakes in Honest Co., Intercos Group, Rhone, ThirdLove, Sweaty Betty and more.
While LVMH through its investment in L Catterton has an indirect tie to the deals the private equity company makes, taking a separate, direct stake — as envisioned with Birkenstock — shows a potential for greater collaboration.
And that collaboration could lead many places.
LVMH has a global presence that could offer Birkenstock a number of avenues for expansion, from more brand tie-ups to presence in the duty-free sector via the French company’s DFS subsidiary.
Already, LVMH is the luxury leader, with a market capitalization of 266 billion euros, and is using its muscle to continue to press its advantage. After much back and forth, Arnault closed on his nearly $16 billion deal to buy Tiffany & Co., giving him one of the few true American luxury brands and new weight in hard luxury.
Having a stake in Birkenstock would give Arnault one more view on the consumer and an opportunity to help drive a storied brand globally. The path LMVH takes could mirror the one it has adopted with another of its recent acquisitions, luggage brand Rimowa. Since acquiring the company, LMVH has stepped up the brand’s designer collaborations and rolled out more stores.
Birkenstock is also at the right place at the right moment with its time-honored aesthetic fitting in with the move toward casualization that has only been strengthened during the coronavirus crisis, with the world shut in at home and looking to stay comfy.
Before this year, Birkenstock was rarely mentioned in deal circles, but now it is part of a rising tide of COVID-19-era footwear dealmaking that has seen Dr. Martens go public on the London Stock Exchange and Adidas look to divest Reebok.
While both of those brands have deep ties in fashion, Birkenstock’s roots go back even further, to 1774, when Johann Adam Birkenstock was listed as “cobbler” in the church archives of Langen-Bergheim.
While that kind of longevity is a rarity in fashion, the brand — known for its anatomically shaped footbed — has managed to keep and grow its cultural cache as the sandal of choice for flower children and, more recently, fashionistas.
Since 2013, the company has been led by chief executive officers Markus Bensberg and Oliver Reichert. The brand has 3,800 employees and lately has been making further inroads into high-fashion, whether through its collaboration with the likes of Rick Owens or ads featuring Manolo Blahnik and his niece Kristina Blahnik, CEO of their family’s own luxury footwear company.
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