If you’re going to charge into the post-pandemic future, might as well do it in comfortable footwear.
That seems to be the thinking at CVC and Permira, two private equity giants said to be circling Birkenstock, weighing a potentially 4 billion euro acquisition of the famed sandal maker.
Goldman Sachs was shopping the brand in the U.S. last year and is said to be running a narrow process to sell it now rather than at a larger auction, sources told WWD. Bloomberg was first to report on Tuesday that Birkenstock was in talks with CVC.
Birkenstock, CVC, Permira and Goldman all declined comment on the process, which offers another window on pandemic dealmaking and just how companies and investors are thinking about the future.
As COVID-19 sent consumers into hibernation last spring, many of the industry’s dealmakers followed suit, waiting for the market to calm and the future to become clearer.
There was a spate of distressed transactions — from Neiman Marcus Group to J.C. Penney Co. Inc. and J. Crew Group — as specialists swooped in to pick companies out of bankruptcy or lenders and other interested parties, like landlords, bit the bullet and became shareholders.
But that spoke more to desperation after the consumer lockdown. It wasn’t until the fall that major players started to make their move, feeling sure enough about the figure to put money on strong brands.
VF Corp. bought Supreme for $2.1 billion-plus and Moncler’s Remo Ruffini cut a deal to buy Stone Island for 1.2 billion euros, setting the tone for hot brands in growth mode.
A deal for Birkenstock could mark the next step in the cycle — that buyers are ready to bet on big brands that are more expensive, more established and much more widely distributed.
Birkenstock Group, Germany’s largest footwear manufacturer, has been led by chief executive officers Markus Bensberg and Oliver Reichert since 2013, although the company traces its origins to 1774, when Johann Adam Birkenstock was listed as “cobbler” in the church archives of Langen-Bergheim.
The company has 3,800 employees focused on bringing Birkenstocks and their anatomically shaped footbed to the world.
The sandals have long had their diehard fans, resonating broadly with hippies and preppies. But Birkenstock has been making inroads in high fashion under the two CEOs — from a collaboration with Rick Owens to ads where Manolo Blahnik and his niece Kristina Blahnik, CEO of their family’s footwear company, fronted the brand’s Personality Campaign.
Kristina called Birkenstocks a wardrobe staple. “From a style perspective, I like the simplicity of their designs with a guarantee of comfort in each and every sandal,” she said. “From a brand standpoint, Birkenstock upholds many of the values that we adhere to at Manolo Blahnik, a tradition-rich, family-run business that believes in the creativity of artist and the craftsmanship of the artisan.”
It could soon be time for private equity to take its place in the Birkenstock story.
Permira, for one, has been keen on footwear in recent years. The investor bought boot mainstay Dr. Martens for 300 million pounds in 2014 and plans to take the company public soon. Permira also snatched up sneaker brand Golden Goose last year in a deal said to carry a price tag of 1.3 billion euros. CVC’s fashion portfolio includes watchmaker Breitling and beauty retailer Douglas.
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