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The German footwear brand – Birkenstock – has reached an agreement to sell a majority stake to consumer-focussed private equity firm L Catterton and its affiliates, including Financière Agache, the family investment company of Bernard Arnault, LVMH’s Chairman and CEO.
The details of the agreement and the acquisition price have not been disclosed due to confidentiality agreements between all parties, and the transaction is subject to the usual antitrust audits. According to Birkenstock, the transaction will facilitate its further strong growth in future growth markets such as China and India and help expand its marketing position in Europe and America by investing in the German sites and expanding production, logistics and sales operations. The company also plans to invest in the further development of its direct-to-consumer business and the expansion of its e-commerce platforms.
“The move comes at a time when the long-established German company is performing better than ever before in its 250-year history. While many companies in the sector have suffered during the Corona crisis, Birkenstock recently reported another record year”, said L Catterton, adding that, in order to accommodate the strong growth, the Birkenstock CEOs recently launched a comprehensive investment offensive that includes expanding production capacity at the world’s largest manufacturing site in Görlitz and strengthening all of the other production sites in Germany.
According to the UK’s GQ Magazine, the shift towards a more understated mode of dressing was happening long before the pandemic struck, after all. “The burgeoning athleisure sector, for instance, hit a record-breaking value of $414bn in 2019 and many of the world’s major luxury brands (a vast swathe of which Mr Arnault owns) that once made the bulk of their cash from selling expensive suits and slick dress shoes to the world’s well-heeled had started moving in a more laid-back direction. This has been thanks in part to the casualisation of the city, which was, in turn, precipitated by the digital boom of the 2000s and the 2010s.”
With approximately US$23 billion of equity capital across its fund strategies and 18 offices around the world, L Catterton is the largest global consumer-focussed private equity firm. Since 1989, the firm has made over 200 investments in leading consumer brands. Financière Agache is a holding company controlled by Agache, the Arnault family holding company. Together with its affiliates, it holds a 97.5% ownership in Christian Dior, the controlling shareholder of LVMH Moët Hennessy Louis Vuitton.
