PARIS—A group of investors led by luxury titan Bernard Arnault has acquired a majority stake in Birkenstock GmbH, valuing the sandal maker at around four billion euros, equivalent to $4.87 billion, according to people familiar with the matter.
The 250-year-old German company announced Friday that owners Christian and Alex Birkenstock had sold more than half of the firm to L Catterton, the private-equity firm Mr. Arnault co-owns, and the Arnault family holding company Financière Agache. That places Birkenstock in the Arnault family portfolio alongside LVMH Moët Hennessy Louis Vuitton SE, the globe-spanning luxury conglomerate that Mr. Arnault controls.
“We truly appreciate brands with this long heritage,” Mr. Arnault said.
The investment is a sign of how the fashion world has come around to a brand that it once snubbed as the unglamorous footwear of granola-eating hippies.
Boot maker Johann Adam Birkenstock founded the company in 1774, but the sandals first arrived in the U.S. in the 1960s on the feet of Margot Fraser, a dressmaker who grew up in Germany. Ms. Fraser was turned away from shoe stores as she tried to find a distributor for Birkenstock. She eventually ended up selling the sandals out of a health-food store in California.
The sandals became a mainstay of the back-to-nature movement, and in the following decades the Birkenstock went mainstream. The mere sight of tourists wearing the leather-and-cork sandals with socks used to make fashionistas shudder on the avenues of Paris.
Over the past decade, however, the Birkenstock began to garner the fashion world’s sincerest form of flattery: the homage.
In September 2012, Parisian fashion house Céline paired sleek clothing with bulky fur-lined sandals. Dubbed “Furkenstocks,” the sandals got tongues wagging. A British newspaper headlined its coverage “Are These the World’s Ugliest Shoes?”
A Birkenstock store in Paris on Friday.
Photo: alain jocard/Agence France-Presse/Getty Images
Other brands jumped on the trend. Givenchy, the haute-couture fashion house owned by LVMH, released its own ergonomic foot-bed sandals with two wide buckled straps. Givenchy’s version came in floral and paisley prints with a price tag of $995.
“Fashion trends tend to roll over us,” Birkenstock Chief Executive Oliver Reichert said in a 2015 interview, recalling how he put his own children in the company catalog.
On Friday, Birkenstock described the deal as a logical step that would allow it to grow its business in markets like China and India. Birkenstock has in recent years added a line of high-end beds and mattresses as well as natural cosmetics to its portfolio of products. The German company employs more than 4,300 employees world-wide and sells its sandals in more than 100 countries.
Birkenstock hasn’t published its 2020 results, but a person close to the company said he expected revenues to be roughly in line with the €721.5 million the firm posted for the 2019 fiscal year.
Write to Stacy Meichtry at [email protected] and Nick Kostov at [email protected]
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