Friday February 26, 2021
End of an era after 250 years
Family business Birkenstock sold
Family business Birkenstock sold
After almost a quarter of a millennium in family ownership, the shoe manufacturer Birkenstock gets new owners. The contract was awarded to professionals from the luxury industry. The descendants of the company founder hope that this will result in more growth in Asia.
It is the end of an era that has lasted almost 250 years: the German shoe manufacturer Birkenstock has been sold. The new owners are the French-American holding company L Catterton and the billionaire Bernard Arnault. You take over a majority in the traditional company from Linz am Rhein, which is known for its health sandals. Birkenstock announced that details had not been disclosed. The approval of the supervisory authorities is still pending. According to insiders, Birkenstock is valued at around four billion euros.
The brothers Alexander and Christian Birkenstock keep a minority stake, the third brother left a few years ago. "For the next 250 years we need partners with the same strategic and long-term vision as that of the Birkenstock family," declared the two heirs of the family company. The new owners have both a "deep understanding of the details of a manufacturing company", which is all about quality, and a respect for brands with a long legacy. Birkenstock was founded in 1774 and has been permanently and wholly owned by the family ever since.
Birkenstock hope that the new owner will offer greater opportunities in the Asian market, where Catterton co-owner LVMH has good connections, it said. Birkenstock has become "one of the few iconic brands" in the shoe industry, said Arnault. Managing director Oliver Reichert – the first external manager in the company's history – told the "Handelsblatt" that production would remain in Germany and that there would be no relocation to Asia.
Not awarded for the highest bid
LVMH includes brands such as Louis Vuitton, Fendi and Christian Dior; the group operates thousands of its own stores worldwide, including in luxury shopping malls in Singapore and Hong Kong. According to its own information, Birkenstock sees growth opportunities in China and India, among others. Reichert, who has been at the helm of the company since 2012, has since established the shoe manufacturer as a brand in the luxury segment.
L Catterton was created in 2016 from the US investor Catterton and the financial investments of the luxury company LVMH. According to its own information, with an invested capital of around 23 billion US dollars, it is the largest global investment company with a focus on consumer goods. Arnault, the majority owner of LVMH and Christian Dior, also has a direct stake in Birkenstock. According to insiders, they had outdone financial investor CVC with their bid. CVC offered an even higher price, it was said; The decisive factor for the contract was that L Catterton and Arnault had access to the industry.
Birkenstock achieved sales of 721 million euros in the 2018/19 financial year (end of September) with around 4,000 employees. 2020 was a record year for the company, although production stood still for two months due to the corona lockdown, an insider said: Demand was unbroken due to the pandemic. According to a person familiar with the process, Birkenstock will be valued at around 15 times operating profit on the sale.
. (tagsToTranslate) economy (t) LVMH (t) acquisitions and mergers (t) family businesses