One of Germany’s best-known footwear brands, Birkenstock, is selling a majority stake to the American-French private equity firm L Catterton and an affiliated firm, Financière Agache, Bernard Arnault’s family investment company.
Financial terms were not disclosed. WWD had reported Feb. 8 that Birkenstock was in exclusive talks with L Catterton for a deal valuing the firm at 4 billion euros.
The two remaining relatives of the founder of the company, Christian and Alex Birkenstock, said they entered “this strategic partnership after carefully examining all options.”
They said the sale would “further strong growth in future growth markets such as China and India” and that the new partners would invest in German sites and expand production, logistics and sales operations. “At the same time, the company plans to invest in the further development of its direct-to-consumer business and the expansion of its e-commerce platforms,” Birkenstock said in a statement.
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Although Birkenstocks’ new connection to Arnault’s LVMH, is indirect — that is, via L Catterton — there is potential for greater collaboration between the luxury giant and the German footwear brand.
A leader in the luxury market, LVMH has a market capitalization of 266 billion euros. Its global presence and stable of brands and companies connect Birkenstock to various possibilities, everything from more of the savvy designer collaborations with the likes of Valentino, Rick Owens and Proenza Schouler that have brought the company so much attention over recent years, to a slot in the duty-free sector, thanks to LVMH’s DFS subsidiary.
Birkenstock has also dabbled in other lifestyle products, including a line of signature beds and a range of natural cosmetics.
Market watchers have suggested that Birkenstock may develop the same way German luggage brand Rimowa has since LVMH bought a majority stake from that family-owned brand’s heirs for 640 million euros in 2016. Since then, LVMH has pushed Rimowa toward more designer collaborations, including with streetwear stalwarts such as Supreme and Off-White, as well as with LVMH stablemate Dior, and opened more Rimowa stores.
L Catterton is a partnership between the original U.S. investment firm Catterton and Arnault’s LVMH and Groupe Arnault, formed in 2016. It describes itself as “the largest, diversified consumer-dedicated private equity firm in the world” and has more than $22 billion under management, with stakes in a wide variety of firms, including Everlane, Ba&sh, Intercos Group, Sweaty Betty and more. L Catterton recently snapped up JOTT, a French maker of puffer jackets.
The Birkenstock brothers, who will stay on with the company and hold a minority share, praised their new business partners for “a deep understanding of the details of a manufacturing business that is all about quality and a respect for brands with a long heritage like ours.”
“We truly appreciate brands with this long heritage,” Arnault said in a statement. “Together we will provide support to the business so it can fully realize its significant growth potential.”
Birkenstock reported revenues of 720 million euros in 2019. In Friday’s statement, Birkenstock said it is “performing better than ever before in its 250-year history and reported “another record year” despite the coronavirus pandemic.
Certainly Birkenstock, which produces around 24 million pairs of shoes per year, has been one of the winners of lockdowns everywhere. Between April and June in 2020, searches for the brand’s distinctive sandals rose 225 percent, according to online fashion search engine Lyst.
A Birkenstock spokesperson noted that the brand has grown steadily over the last decade: “Sure, the lockdown and home office has given us a boost. But Birkenstock was beloved before the pandemic, and we believe we will be after the pandemic, too.”
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