Birkenstock billionaire brothers bank US$3.4 billion on buyout bet

BIRKENSTOCK’S seemingly ubiquitous US$130 leather sandals have helped the German family behind the brand build one of the biggest footwear fortunes on the planet.

With Birkenstock Holding’s trading debut on Wednesday (Oct 11) in New York, brothers Alex and Christian Birkenstock are now worth US$3.4 billion, according to the Bloomberg Billionaires Index, even after the shares slumped 13 per cent in the worst opening for a New York listing of US$1 billion or more in over two years.

It is a significant payoff for the German cobbler heirs’ bet to hand over majority control of the historic shoemaker to private equity firm L Catterton in 2021. Christian has notched a return of more than 100 per cent on the minority stake he retained. Alex is no longer listed as a shareholder.

Together, they collected over three billion euros (S$4.34 billion) from the 2021 transaction, which set the shoemaker on the path to public markets. In the two years before the deal, the brothers were receiving about 100 million euros a year in dividends, filings show.

Representatives for Birkenstock and L Catterton did not respond to requests for comment.

Family tradition

The Birkenstock dynasty started nearly 250 years ago with Johannes and Johann Adam, shoemakers in Langen-Bergheim, a small village around 40 kilometres north-east of Frankfurt. Johannes’ descendants continued the family tradition, transforming their footwear into its recognisable modern form when Karl Birkenstock introduced the first model of the company’s famed sandal in 1963.

Alex and Christian both became involved in the family business in the 1980s when they were teenagers. Their older brother Stephan joined in the ‘90s. The trio continued the firm’s global expansion, helping turn the orthopaedic shoes into one of the most recognisable footwear brands on the planet today, with boots and clogs worn by supermodels and grandparents alike.

The brothers stepped back from running the business through a transition period that began in 2009, with Stephan exiting the business as a shareholder for an undisclosed sum.

The Birkenstock brothers are not the only European fashion billionaires who stand to make millions off the sandal company’s listing. L Catterton is part-owned by luxury conglomerate LVMH and its founder Bernard Arnault, the second-richest person on the planet with a US$170 billion fortune. Arnault’s son, Alexandre, is set to join Birkenstock’s board.

SEE ALSO

Birkenstock attracts Norwegian wealth fund to US$1.6 billion IPO

L Catterton’s purchase of Birkenstock spawned from secret meetings in high-end hotels, video calls and trips to the shoemaker’s manufacturing sites on the German-Polish border. L Catterton’s co-chief executive officer, J Michael Chu, bought a pair of Birkenstocks before his first in-person meeting with the shoemaker’s top executive, Oliver Reichert. He did not wear them for the encounter.

Reichert also helps to oversee Christian’s investments outside the footwear firm, including Bucci, a German nutrition business, and Buccara, which offers luxury travel experiences across parts of Europe and South Africa.

Alex has shifted his wealth into high-end real estate, buying a six-bedroom Manhattan penthouse in 2011 that’s now available to rent for US$25,000 a month. The following year, he also emerged as the seller of a triplex penthouse in the South Beach section of Miami Beach for US$25 million, more than double what the billionaire scion originally paid for it only a few years before. BLOOMBERG