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LVMH-backed company buys majority stake in Birkenstock

Birkenstock has agreed to sell its majority stake to LVMH-backed private equity firm L Catterton in a deal that would bring German sandal and shoe maker Birkenstock closer to French luxury firm LVMH, but the financial details of the deal were not disclosed.

Birkenstock said that this deal will contribute to the growth of its business in China and India in addition to expanding its business on the Internet, and sources close to the companies stated that the deal valued the German company at about 4 million euros (equivalent to 4.85 billion dollars).

Along with L Catterton, Financiere Agache, the French billionaire’s business manager and LVMH chairman Bernard Arnault, will participate in the purchase. L Catterton’s previous investments include Pepe Jeans, online store Everlane and exercise equipment brand Sweaty Betty.

Birkenstock, which dates back to 1774 and sells sandals in more than 100 countries, said it had a record year in 2020 despite the coronavirus pandemic, and is currently increasing its production capacity in Germany, although it has not yet announced the results for 2020, it generated revenues of 721.5 million euros in a year from the date of September 30, 2019.

Founded in 2016, L Catterton is a joint venture between private equity firm Catterton and LVMH as well as Groupe Arnault, the holding company for Arnault’s business, which currently manages approximately $23 billion in assets.

According to the latest reports, LVMH this week bought a 50% stake in the Armand de Brignac champagne brand owned by the famous rap star Jay-Z, and although LVMH suspended its Fenty fashion venture with pop star Rihanna, however, it acquired a stake in the famous singer’s lingerie line through L Catterton.

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