Digital-first sustainable footwear brand Rothy’s has confirmed that Alpargatas, the Brazilian lifestyle brand and owner of Havaianas will acquire 49.9 percent of the business in a two-step transaction.
The strategic investment from Alpargatas will include an investment of 200 million US dollars in primary capital followed by an offering to acquire approximately 275 million dollars of Rothy’s shares from current stockholders. This will result in a post-investment valuation of 1 billion dollars for the San Francisco-based footwear brand.
Rothy’s co-founders Stephen Hawthornthwaite and Roth Martin will maintain a significant equity stake in the business and will continue to oversee operations. Lightspeed Ventures and other existing investors will also continue to have a “meaningful equity position”.
This investment will help Rothy’s fuel global growth and help it to expand vertically-integrated operations, as Alpargatas owns and operates six factories in Brazil, while Rothy’s owns and operates a 300,000 square foot factory in Dongguan, China.
In a statement, Rothy’s said while it has a “rapidly growing” customer base in the US, this investment will help it increase its international reach, particularly in Asia, Europe and Brazil.
Stephen Hawthornthwaite, co-founder and chief executive of Rothy’s, said: “We founded Rothy’s with the belief that there’s a better way to do business, and it starts by putting the planet and its people first. In less than a decade, we’ve transformed our two-person passion project into a successful, sustainable and deeply innovative company – and redefined the shoe category.
“This partnership with Alpargatas marks the beginning of our next chapter of growth, and reaffirms the strength of our business model and momentum in the marketplace. With Alpargatas’ financial support, scale and expertise, we look forward to rapidly expanding in global markets, building our physical retail presence, advancing product development and accelerating our goal to reach circular production by 2023.”
Rothy’s receives “significant investment” from Alpargatas
Founded in 2012, Rothy’s with a mission to create a shoe with “distinctive style, remarkable comfort and sustainable design”. To combat the staggering amount of waste inherent to the shoe industry, the co-founders Hawthornthwaite and Martin have transformed more than 100 million single-use plastic water bottles into machine-washable shoes.
As a digital-first brand, Rothy’s currently generates 98 percent of its sales via online channels and has built a loyal community of more than two million customers since expanding beyond women’s footwear into the men’s and accessories categories.
Roth Martin, co-founder and president at Rothy’s, said: “In Alpargatas, we are pleased to have found an established industry leader with a rich heritage, tremendous scale and resources, vertically-integrated operations and a people-first approach that clearly aligns with our values at Rothy’s.
“Very few footwear brands understand the challenges and unique opportunities that owning a factory presents – and Alpargatas has written the playbook. We are confident that Alpargatas will be a valuable thought partner for Rothy’s, and look forward to working together to prove that it is possible to run a large-scale, profitable business sustainably and responsibly.”
Roberto Funari, chief executive of Alpargatas, added: “Alpargatas has built a portfolio of desired and hyperconnected brands, including the world’s largest open footwear lifestyle brand, with over 260 million pairs of flip flops sold annually across more than 130 countries.
“We are excited to welcome Rothy’s to our portfolio, and admire Rothy’s entrepreneurial, passionate founders and team. We value their digital-first business and loyal customer base, and view this partnership as an important opportunity to advance our global strategy with increased relevance in the North American market. We are eager to work with Stephen, Roth and the entire Rothy’s team to expand the brand’s community all over the world through new retail and ecommerce channels.”
Following the completion of the transaction, Funari and Stacey Brown, an independent member of Alpargatas’ board of directors, will join the Rothy’s board, which will expand to nine directors, including four seats for Alpargatas.