Birkenstock, the renowned German flat sandal manufacturer known for its comfortable yet unfashionable footwear, has taken a leap into the luxury market. The company has been acquired by L Catterton, a company backed by luxury conglomerate LVMH, and Bernard Arnault’s family holding fund, Financiere Agache. While the exact price of the acquisition remains undisclosed, experts estimate it to be around €4 billion ($4.9 billion). Despite the sale, the Birkenstock family, who established the business in 1774, will retain a stake in the company.
This move marks a significant milestone for Birkenstock, which originally specialized in orthopedic shoes. Its breakthrough into the international market came during the 1960s when their flat sandals gained popularity in the United States. The shoes’ simple comfort and anti-fashion appeal attracted the attention of hippies, thrusting Birkenstock into the global spotlight. However, it wasn’t until the 1990s, when supermodel Kate Moss sported the sandals, that the brand transcended its “unfashionable” image, especially in Germany where they were commonly paired with socks.
Since then, Birkenstock sandals have become a favorite among Hollywood celebrities, and top fashion brands like Paco Rabanne, Valentino, and Celine have even created their own customized versions. The company has seen tremendous success, selling a staggering 23.8 million pairs of shoes and generating €721.5 million in revenue in the financial year ending September 2019. The reported sale price indicates that the brand itself carries a significant premium.
Remarkably, Birkenstock remained resilient even during the COVID-19 pandemic, with the company reporting record revenues in 2020. Despite worldwide retail closures, the rise in remote work and the growing trend of casual dressing played a role in boosting sales. Fflur Roberts, an analyst at Euromonitor International, predicts that this casualization trend will persist in the near future as consumers increasingly prioritize comfort and relaxed attire.
Beyond the financial gains, Birkenstock intends to leverage its partnership with LVMH to expand its presence in the Asian market. The company’s new co-owners provide valuable access and contacts in the region. Nevertheless, Birkenstock remains committed to its German heritage and has no plans to relocate its production to Asia or any other location.
The acquisition by L Catterton and Financiere Agache exemplifies Birkenstock’s growth potential and its allure as a brand. With its unique combination of comfort, heritage, and fashion appeal, Birkenstock is well-positioned for success in the luxury market under its new owners. As the company embarks on this new chapter, it is primed to maintain its position as a leader in the global footwear industry, consistently delivering high-quality, comfortable footwear to its dedicated customer base.
Useful links:
– Birkenstock History
– L Catterton
