Upmarket sandals Birkenstock selling majority stake to global investors
Linz am Rhein · Birkenstock sandals are widely known on every continent. The German family-owned company wants to grow its brand worldwide and is selling the majority of its shares to global investors. The price of the sale has not been disclosed.
Once considered a little old-fashioned, today Birkenstock is a cult brand even among some celebrities. Now, a majority stake of the world-famous sandal manufacturer is going to be sold to the American-French investment company L Catterton and the family holding Financière Agache majority.
"The details of the agreement were not disclosed," the company, based in Linz am Rhein in the Rhineland-Palatinate, announced on Friday. It said the transaction was subject to approval by authorities. The partnership is "the next logical step for Birkenstock to continue to facilitate further strong growth in future markets such as China and India.”
The heirs Christian and Alex Birkenstock explained the sale as follows: "For the next 250 years, we need partners with the same strategic and long-term vision as the Birkenstock family. In L Catterton and Financière Agache, we have found those partners." This is a reference to the fact that Birkenstock is already almost 250 years old - its beginnings date back to 1774.
L Catterton is linked to French luxury manufacturer LVMH with brands such as Christian Dior, Louis Vuitton and Kenzo. Financière Agache is the holding company of billionaire LVMH chief Bernard Arnault. He pointed out that Birkenstock "has become one of the few iconic brands in the footwear industry. We highly value brands with this long heritage."
Other bidders had also expressed interest in Birkenstock. According to information from the Deutsche Presse-Agentur, of these, Luxembourg-based financial investor CVC remained in the bidding, until Birkenstock finally negotiated only with L Catterton and Financière Agache in the end.
The sixth-generation German family-owned company with around 4,300 employees says it is on a stable economic footing. In 2019, it reported sales of around 720 million euros and a net profit of 130 million euros - and in the coronavirus pandemic year of 2020, despite two months of factory closures, it also generated revenues at around the previous year's level.
According to Birkenstock, its partial sale is aimed at gaining new market access in Asia and the Middle East. Christian and Alex Birkenstock remain minority shareholders. A third brother has long since left the company. In 2012, according to Birkenstock, Oliver Reichert and Markus Bensberg were the first non-family directors to join the company, which is located in Linz am Rhein.
Birkenstock asserts that this is in no way a sell-off of a traditional German company. All jobs will be retained. Investments in the production facilities have only recently been increased. These are almost all located in Germany - apart from one site in Portugal.
The indirect access of LVMH with its luxury brands - does this mean Birkenstock shoes will now become more expensive? No, assures a company spokesman. The company will continue to produce footwear for the general public, starting at around 60 euros for a pair of shoes. Special collections in collaboration with designers could, of course, be considerably more expensive.
Hippies, doctors and medical workers first discovered Birkenstock sandals. Many people chose them as comfortable home and leisure shoes. Birkenstock calls itself the inventor of the footbed. Today, with 16 locations in Germany and numerous sales offices abroad, the company focuses on lifestyle. Birkenstock says it sells sandals in more than 100 countries. The company also offers closed shoes, socks, bags and belts - and since 2017 also natural cosmetics and beds.
(Orig. text: Jens Albes, dpa / Translation: ck)
