Earlier this week, Rothy’s landed a deal valuing it at $1 billion. Alpargatas S.A., the Brazilian company behind flip-flop brand Havaianas, has scooped up a 49.9% stake in the sustainable footwear label.
In a two-step transaction, Alpargatas will invest $200 million in cash followed by an offering to acquire approximately $275 million of Rothy’s shares from current stockholders, resulting in a post-investment valuation of $1 billion.
Co-founder and CEO of Rothy’s, Stephen Hawthornthwaite, said the partnership will build on Rothy’s current momentum while advancing the vision of creating a profitable and sustainable global business.
Hawthornthwaite and co-founder Roth Martin will maintain a significant equity stake in the business and continue to oversee operations.
“This partnership with Alpargatas is all about growth,” Hawthornthwaite told FN. “The key opportunities we’re focused on include international expansion, building our retail presence and advancing sustainability. The additional capital we’ll gain through this investment will help us fuel our pipeline of product innovations, with potential to expand into new styles and sustainable materials.”
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Prior to the investment news, Rothy’s has been aggressive on the brick-and-mortar front. The company told FN in September that it plans to double its retail footprint by early 2022 — that’s in addition to its current six locations. Rothy’s retail will launch for the first time in Pasadena and San Jose, Calif., Atlanta and Scottsdale, Ariz. And the brand will expand its presence in Los Angeles and New York, which currently have stores.
While Hawthornthwaite couldn’t give an exact number of additional stores that will launch next year, he said: “Rothy’s stores provide an important platform to raise awareness of our company, connect with our customers in their search for the perfect fit, and grow our community. We’re intentional about our retail expansion, with all of our stores located in cities that have a healthy blend of both existing and potential new customers. We view our partnership with Alpargatas as an important opportunity to advance these efforts.”
Both Alpargatas and Rothy’s have vertically-integrated operations, owning their own factories in Brazil and China, respectively. With that, Hawthornthwaite said he expects expansion of its global manufacturing operations.
Plus, Rothy’s still has its eyes set on its commitment to reach circular production by 2023.
“Like Rothy’s, Alpargatas is working to create a more sustainable future for our industry and is committed to environmental and social responsibility,” Hawthornthwaite said. “We expect the added scale, resources and expertise we’ll gain through this partnership to help us accelerate our goal.”
