A vertiginous Christian Louboutin stiletto, a chunky Dr. Martens boot and a wide-strapped Birkenstock sandal.
Three different shoes, one common feature: The owners of their makers are cashing out for billions of dollars.
Exor NV, the holding company of Italy’s Ferrari-owning billionaire clan, the Agnellis, announced last week it’s buying almost a quarter of Christian Louboutin SAS in a deal that will give its eponymous figurehead a net worth of at least $1.2 billion, according to data compiled by Bloomberg.
The deal follows two other recent transactions involving owners of revered shoe brands: the sale of Birkenstock to L Catterton at a valuation of about 4 billion euros ($4.8 billion) and the $1.8 billion initial public offering of Dr. Martens Plc. The former made billionaires of brothers Christian and Alex Birkenstock (a third brother, Stephan, sold his stake in 2013), while the latter has given the founding family, the Griggs, a fortune valued at more than $500 million.
Meanwhile, rapper Kanye West’s sneaker and apparel business, Yeezy, is valued from $3.2 billion to $4.7 billion by UBS Group AG. Sales for Yeezy’s Adidas sneakers grew 31% to nearly $1.7 billion in annual revenue last year, netting Yeezy $191 million in royalties, according to a UBS document reviewed by Bloomberg.
Casual Shift
The pandemic has boosted a shift toward casual footwear that was already in motion, according to Bloomberg Intelligence analyst Deborah Aitken. Flexible working arrangements and a newfound appreciation for the outdoors will likely sustain it.
Despite the pandemic’s crushing blow to the economy -- particularly the retail sector -- luxury fortunes have soared in the past year. Europe’s richest person and backer of Birkenstock-owner L Catterton, Bernard Arnault, has added $69 billion in wealth, according to the Bloomberg Billionaires Index, as shares of his LVMH have almost doubled. His rival, Kering SA founder Francois Pinault, is up by more than $20 billion.
“The luxury sector has outperformed over the past year, and proved how versatile every category can be in downturns,” Aitken said.
Driving it all is faith in a resounding post-Covid bounce-back, a brisker-than-expected pivot to online luxury shopping and the swift recovery of China, a crucial market for the world’s priciest brands.
“Chinese consumers made up about a third of the global market for luxury goods before the pandemic, but most of their purchases were overseas,” Aitken said. “Now they’re unable to travel and you have a massive explosion in e-commerce at the same time.”