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Private equity groups signal interest as brands mixing comfort, heritage and durability soar during pandemic.

  • Birkenstocks continue to run and run Founded in 1774 in Langen-Bergheim, Germany, by cobbler Johann Adam Birkenstock, the company is still owned by descendants of its founder. It still makes all its footwear in Germany, with the trademark functional cork footbed.

German sandal maker Birkenstock is at the centre of a €4bn (£3.5bn) takeover battle as the trend for casual footwear steps up during the pandemic.

Private equity firm CVC Capital Partners, the owner of dozens of companies from motorway services firm Moto to luxury watchmaker Breitling, is vying to buy a majority stake in Birkenstock with L Catterton, a private equity firm part-owned by Louis Vuitton and Christian Dior owner LVMH. L Catterton already owns fashion brands including Ganni, Seafolly and Pepe Jeans.

Founded in 1774 in Langen-Bergheim by cobbler Johann Adam Birkenstock, the company set up its first factory in 1925.
It is still owned by descendants of its founder - brothers Alex and Christian Birkenstock - and continues to make all its footwear in Germany.

Flip-flop sales surge as casual and comfortable fashion wins lockdownRead more.

The Birkenstock brothers began to look for new investment late last year as they try to drive expansion in newer markets including China and India.

L Catterton is understood to be the favoured bidder, because of its expertise in taking brands to Asia and knowledge of the fashion market, but the company has yet to finalise its offer.

Interest in brands that mix comfort and heritage has soared during the pandemic, helping bootmaker Dr Martens' launch on the London stock market with a valuation of £3.7bn last month. The firm already has a market valuation of more than £5bn.

Birkenstock sales surged 11% to €721.5m in 2019, when nearly 24m pairs of sandals were sold worldwide. Even more of the blocky footwear is thought to have sold in 2020 as Birkenstock's comfy sandals and clogs became a lockdown hit in many countries, including the UK.

Nicla di Palma, an analyst at Brewin Dolphin, said brands such as Dr Martens and Birkenstock were riding on the back of a trend towards comfort and durability over style, both at work and at home.

"This was happening well before covid but the pandemic has accelerated the trend as has happened with many other [trends]," she said.

Lorna Hall, director of fashion intelligence at consumer trends forecaster WGSN, said interest in Dr Martens and Birkenstock was high because there were few brands with the same genuine heritage.

"They have authentic heritage at a mid price and are associated with the drivers of fashionability at the moment - comfort and health," Hall said, adding that Birkenstock was also linked to sustainability, which is fast becoming an important factor for consumers.

Comfortable footwear is hot property because of an increasing acceptance of casual dressing in society, while younger shoppers' are no longer wedded to high heels and delicate footwear. "Traditional ideas of femininity have completely changed. Those archetypes still exist but for a certain job or going on a particular night out," Hall said.

Hall added that Birkenstock and Dr Martens regularly reinvented themselves for new audiences by mimicking the luxury brands' tactic of collaborating with designers or other brands to bring in fresh ideas. Birkenstock, in particular, has brought in new shoe shapes on a regular basis to create trends within its own brand.

"They have not sat on their laurels and that has driven volumes," Hall said.