Private equity firms reportedly in negotiations for Birkenstock acquisition
In a significant move for the footwear industry, German footwear brand Birkenstock is reportedly in advanced talks to be sold to a European private equity firm for a staggering $4.8 billion. According to Bloomberg, the potential buyer is L Catterton, a private European investment firm.
The news comes as no surprise, given the surge in popularity of Birkenstock's comfy leather sandals. The brand has expanded its following not just among its traditional bohemian demographic, but also among fashionistas, as consumers gravitate towards more comfortable footwear.
The pandemic has only accelerated this trend, with people spending more time at home and seeking comfort in their daily attire. This shift in consumer behaviour was reflected in a report by The NPD Group last week, which found that brands like UGG, Crocs, and Birkenstock were bright spots in an otherwise tough year for footwear.
However, the industry should not plan for a major resurgence in fashion footwear, according to NPD's Future of Footwear report. The report projects that in 2021, the fashion category will recoup less than half of the volume it lost in 2020. The survey also found that 70% of consumers plan to dress at least as casually as they did before the pandemic once they return to work and resume normal activities.
Birkenstock, a brand with a rich history dating back to its invention in Germany in 1774, has come a long way since its heyday in the U.S. in the sixties. The brand, which opened its first company-owned U.S. store three years ago, has expanded its assortment to include a wider variety of finishes and styles.
Despite the potential sale, Birkenstock did not immediately return a request for comment. The potential buyer, CVC Capital Partners, declined to comment on the matter. CVC Capital Partners, which already owns Swiss watch brand Breitling and German beauty retailer Douglas, is known for its investments in luxury and consumer brands.
It remains to be seen how the sale will impact Birkenstock's future direction. However, one thing is certain - the brand's commitment to comfort and quality has resonated with consumers, making it a sought-after asset in the footwear industry.
