The world-famous sandal manufacturer Birkenstock is majority taken over by the French billionaire and LVMH boss Bernard Arnault and his holding company L. Catterton. With this takeover, is Birkenstock jeopardizing the quality mark “Made in Germany” and an almost 250 year old tradition?
Surprising takeover at Birkenstock
Hardly any other brand has enjoyed such great popularity in recent years as this: Birkenstock! It wasn't just last summer that they shed their former image as organic health shoes that only wear eco-friendly products. Over the past few years, Birkenstocks have become the greatest summer shoe classic – In 2019 alone, the company produced around 25 million pairs of shoes and sandals. So it's no wonder that the shoes with the straps are among the 10 best-selling products of 2020. A hype that will not end in 2021 either. Because soon fashion enthusiasts around the world will swear by German shoes with cork soles. And this could exactly be the reason for the surprising takeover of the traditional German company.
Louis Vuitton billionaire buys organic sandals
As has now become known, the majority of the company will go to the American-French investment company L. Catterton and the family holding Financière Agache, which belongs to the LVMH group of the French billionaire Bernard Arnault. Purchase price of the shares: 4 billion euros. With the sale, the former health sandal joins in a row Luxury brands like Christian Dior, Louis Vuitton and Fendi on. Despite the takeover of the shares, the heirs of the shoe manufacturer Alexander and Christian Birkenstock remain minority shareholders. “It was agreed not to disclose the details of the agreement,” said Birkenstock in a press release. But why does such a takeover come about after such a long time and great sales figures?
Asian market is to be developed
Although Birkenstock has opened up the European and American markets for itself, it has not yet expanded into Asia. China and India in particular are important growth markets for the sandal manufacturer. Not only to finance this, but mainly due to a lack of expertise, the luxury brand investor is now entering the market. “For the next 250 years we need partners with the same strategic and long-term vision as that of the Birkenstock family. We have found these partners in L. Catterton and Financière Agache. "
The end of "Made in Germany"?
Does this mean the end of the quality label “Made in Germany”? The previously family-run company, which can look back on a tradition in the shoe trade since 1744, produces all of its products in Germany. According to Birkenstock managing director Oliver Reichert, this should stay that way. He told the Handelsblatt: "We are firmly anchored in Germany and nothing will change about that". In addition, the new shareholders bring with them a “deep understanding of the details of a production company where everything revolves around quality”. So are the former health slippers now becoming a new luxury product? If you want to make provisions, it is best to buy your new summer sandals now – because these are usually a bit cheaper in the cold season than in the warm months of the year!
Not all companies are currently doing as well as Birkenstock. While the sandal manufacturer was able to increase its sales even during the corona pandemic, those of the other brands are falling so sharply that they either close branches or have to file for bankruptcy: