About 250 of the company ‘s 250 – year – old heirs, brothers Alex and Christian Birkenstock, are worth about $ 1.7 billion each after they lost control of the family business.
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Two heirs to one of Germany’s most famous football brands have emerged as billionaires after agreeing to sell a majority stake in Birkenstock to a private equity group backed by the world’s third richest person.
Brothers Alex and Christian Birkenstock are valued at approximately $ 1.7 billion each based on the $ 4.87 billion value realized by the sale of up to 70% of the business to L Catterton, an asset controlled by LVMH billionaire chief executive Bernard Arnault , and his family owned company Financière Agache.
The deal was confirmed by the company last week, which said the brothers, who have similar commitments, will sell more than half of the company and remain small shareholders once And that it is ready. German newspaper The Spiegel report that the brothers sell 60% to 70%. A spokesman declined to comment on the matter.
None of the brothers have much to do with the business these days. Alex Birkenstock, 52, has reportedly spent time assembling buildings in big cities like Miami and New York and developing a sprawling home on Lake Tegernsee, a spa town in southern Germany, in the there is a two-story underground parking space with 20 spaces. Christian, 48, is said to live hours away from the company’s headquarters. A third brother, Stephan, sold the bet in 2013.
The sandals – the most popular among hippies and grandads around the world – have been made by the family for nearly 250 years. Church records from the German city of Langen-Bergheim identify Johann Adam Birkenstock in 1774 as a “subject and cobbler” who opened his great-grandson, Konrad, two shoe stores in nearby Frankfurt and started manufactures and sells flexible foot insoles. they were contaminated, rather than flat, which provided additional support.
Demand for the shoes was so great that in 1925 he moved to a much larger factory to increase production. His son, Carl, entered the industry as a teenager and went on to become a leading authority in podiatry circles, launching training courses and writing a textbook on what it takes to make shoes comfortable. to create and promote healthy walking.
The company began making their trading sandals in the 1960s, under Carl Birkenstock’s son, Karl. The first style, known as the Madrid, had a deep and flexible sole made of cork and latex and was billed as a shoe that could be worn during exercise. They began selling in the U.S. in 1966, after a consumer used the shoes to help relieve foot pain themselves began distributing them in health food stores.
The three brothers took control of their father in 2002. It didn’t go well. After several decades under the leadership of a strong, single-family patriarch, each brother or sister had different views for the company and struggled to control dozens of rival subsidiaries whose father had created to increase efficiency in the performance of specific tasks such as manufacturing and distribution.
To add to the family drama, Christian’s ex-wife Susanne launched a competitive shoe brand in 2003 after 16 years of marriage and two children. Called Beautystep, it was marketed as a shoe designed by Susanne Birkenstock and the wearer should feel like they were walking on the beach, designed to stretch and flex the leg muscles. promote blood circulation. An ugly legal battle ensued, with a court eventually ruling that she could sell her shoes as long as she did not reveal the family’s last name.
In 2013, the brothers decided to step back. Stephan Birkenstock sold his money to his two brothers and apparently kissed hundreds of millions of dollars, based on finances and multiples reported by the company for public commercial companies at the time. His brothers hired Oliver Reichert as the first outsider to run the business after an opportunity occurred – Christian Birkenstock reportedly met Reichert after his art dealer took over while and he was skipping some pictures and the three of them ended up sipping beer. Reichert, who spent the previous decade at a German sports television channel, had no experience in the shoe industry. His main point of information: He had worn Birkenstocks as a child. To help run the company, longtime employee Markus Bensberg has been named co-CEO.
The new management team quickly put the company’s 38 individual organizations for a simpler structure. They expanded production, hired more retailers and started offering the clunky shoes in edgier colors and styles, which helped them meet celebrities and fashion-forward millennials. Sales rose by double digits each year, eventually tripling to $ 870 million (721 million euros) in 2019.
Today, Birkenstocks is sold in more than 100 countries and the company employs 4,300 people worldwide. They sold nearly 24 million pairs in 2019.