As Christmas eve approached last year, Germany’s savviest dealmaker thought he’d pocketed a special gift.
In the early hours of December 24, Alexander Dibelius struck a gentleman’s agreement with Oliver Reichert, the chief executive of Birkenstock. CVC Capital Partners, the buyout firm where Mr Dibelius is a managing partner, was set to buy the iconic German sandal-maker for more than €3.5 billion ($4.2bn).
For CVC, Birkenstock had all the ingredients of a promising investment: a brand that resonates with its eco-warrior credentials and rich heritage, coupled with the allure of untapped growth in markets like Asia. After several years, CVC would pump up Birkenstock, go global and then move on. Mr Dibelius, 61, stood to make the deal his crowning buyout.
But within weeks of that late December accord, the carefully choreographed pact between the two unlikely partners began to unravel, to the surprise of CVC and advisers working on the deal. Instead, Mr Reichert switched over to L Catterton, a private equity firm that flies under the radar but boasts a powerful backer: LVMH chief executive Bernard Arnault, who became Europe’s richest man thanks to a nose for brands he can supercharge in the engine room of his French luxury emporium.
In a matter of weeks, L Catterton sealed the deal to buy Birkenstock for more than €4bn, relegating CVC to the role of jilted bride. For Mr Dibelius and his advisers, endless rounds of poring over the numbers and the back-and-forth with Mr Reichert ended with nothing more than a feeling that CVC may have been strung along by a shrewd chief executive and his bank, Goldman Sachs, which Mr Dibelius previously ran in Germany.
This story is based on interviews with several people with knowledge of the negotiations or close to the parties involved.
In retrospect, the manoeuver was vintage Mr Reichert, a towering American football player attuned to aggressive moves. A former journalist, Mr Reichert is credited with turning around Birkenstock after joining the company almost a decade ago.
At the time, business was lacklustre, in no small part because the three brothers – Christian, Stephan and Alex Birkenstock – had shown little talent in running the family company they inherited from their father Karl.
Mr Reichert got to know Christian Birkenstock through a mutual acquaintance. By 2013, the family scion, realising he was a better owner than manager, decided to take a punt: Mr Reichert would take over with a select few outside executives to run the company.
The new co-chief executive used his linebacker skills and pushed through the brothers’ exit from management as well as a buyout of Stephan at a fraction of the later purchase price.
While Birkenstock is among Germany’s oldest companies – the roots of the business date back to 1774 – Mr Reichert understood that it perfectly matched the zeitgeist of the modern consumer: green chic, Made-in-Germany durability and a design language that defies age or gender. Birkenstocks are equally at home on a Paris catwalk, a California beach or in a drab hospital ward. Even German supermodel Heidi Klum cooked up a collection.
Mr Reichert carefully curated collaborations with partners such as fashion designer Rick Owens. The company sold 23.8 million pairs of shoes in the financial year through September 2019, which helped sales rise 11 per cent to €721.5 million. That’s more than twice as much as Birkenstock sold when Mr Reichert joined.
With success came a more lavish lifestyle. In interviews, Mr Reichert displayed his love for the finer things in life, like checking in to the plush surroundings of Claridge’s Hotel in London. The Birkenstock brothers, for their part, spent more time in Kitzbuhel, the upmarket Austrian ski resort where Mr Dibelius also owns a chalet.
A former heart surgeon, Mr Dibelius joined Goldman Sachs in 1993 and advised on some of the world’s biggest deals, including Vodafone Group’s acquisition of Mannesmann in 2000. He switched to CVC in 2015, where he helped take over companies including watchmaker Breitling.
Other Kitzbuhel neighbours include the Wirtgen brothers, who had sold their late father’s namesake road-construction company to Deere & Co in 2017 for €4.bn – a number that impressed the Birkenstocks. If paving machines could mint billionaires, then surely so could the humble sandal, their thinking went. And Mr Reichert would be the man to make it happen.
The chief executive had always embraced a challenge. In early 2018, Birkenstock stopped selling its shoes on Amazon.com after accusing the online retailer of failing to police its platform for counterfeits.
“Never fight the bear in his cave,” Mr Reichert told a conference in Berlin days after pulling the plug on Amazon. It was a public David-versus-Goliath battle that won Mr Reichert plaudits from Big Tech-averse consumers and cemented his reputation as a chief executive who relishes a good fight.
Mr Reichert also had a personal interest to control the Birkenstock sale, not least because it possibly meant saving his own skin. At CVC, doubts had crept about whether Mr Reichert was in fact the right man to take Birkenstock to the next level. He might have successfully turned around the business and kept the bumbling Birkenstock brothers at bay, but could he truly transform the footwear maker into a global brand?
Such scepticism about his role at the company didn’t go undetected by the chief executive. And it considerably dimmed Mr Reichert’s enthusiasm to sell to a new owner where he couldn’t be sure about his future. Besides, Mr Reichert had long dreamed of selling to the House of LVMH rather than a faceless financier.
But despite a loose connection with Bernard Arnault and his 28-year-old son Alexandre, Mr Reichert couldn’t score a direct sale to the elder Arnault’s kingdom.
The personal link did, however, lead him to L Catterton, which was looking for new consumer-oriented assets. Back in 2016, Greenwich, Connecticut-based Catterton had merged with private equity operations backed by LVMH and Mr Arnault’s family holding company, with the French side owning 40 per cent.
By August of last year, Birkenstock had quietly signed on Goldman Sachs as adviser, and the US bank set up a meeting at an upmarket hotel in London’s Mayfair district between Mr Reichert and Mike Chu, L Catterton’s co-chief executive. Mr Chu purchased a pair of Birkenstocks before the meeting, though he didn’t wear them to see Mr Reichert. The encounter turned from a one-hour introduction into a four-hour meeting of the minds.
Whatever unspoken animosity might have existed between the two alpha males Mr Reichert and Mr Dibelius, the chemistry between the Birkenstock chief executive and the down-to-earth Mr Chu was positive from the get-go.
The secret Mayfair meeting was followed by more discreet conversations later in the year, both in person and on video calls between the Birkenstock and the L Catterton teams. Members from the L Catterton camp headed out to Goerlitz on the German-Polish border, where Birkenstock makes most of its sandals, and by late January, the two sides felt good about striking a deal.
Meanwhile at CVC, Mr Dibelius and the advisers were beginning to wonder why their calls and text messages to Mr Reichert weren’t being returned. The line to Birkenstock had suddenly gone inexplicably dead.
Goldman Sachs told CVC that Birkenstock wasn’t yet satisfied with the offer. Encouraged that all was not lost, Mr Dibelius set to improve portions of the fully-financed offer and stood ready to sign a deal as pledged.
But the Birkenstock boss never returned to the table. Toward the end of January, CVC learned that L Catterton would be granted exclusivity, all but shutting out the competition. What looked like a done deal less than a month earlier had crumbled to dust.
The L Catterton team flew into Munich around February 24, and two days later, Mr Reichert signed the papers in a conference room above the historic Cafe Luitpold. After nearly 250 years in family hands, Birkenstock announced a new majority owner in L Catterton, as well as a direct investment from Bernard Arnault’s family.
In a parting shot, Mr Reichert laid out the logic for choosing L Catterton: with the American-French firm, Birkenstock had found a partner for the next 250 years, he told German business daily Handelsblatt about the accord.
Without mentioning a name, Mr Reichert snubbed what he called “a mere financial investor with nothing else in mind than rapidly milking the company for cash.”
Racecard
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Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
KILLING OF QASSEM SULEIMANI
Key figures in the life of the fort
Sheikh Dhiyab bin Isa (ruled 1761-1793) Built Qasr Al Hosn as a watchtower to guard over the only freshwater well on Abu Dhabi island.
Sheikh Shakhbut bin Dhiyab (ruled 1793-1816) Expanded the tower into a small fort and transferred his ruling place of residence from Liwa Oasis to the fort on the island.
Sheikh Tahnoon bin Shakhbut (ruled 1818-1833) Expanded Qasr Al Hosn further as Abu Dhabi grew from a small village of palm huts to a town of more than 5,000 inhabitants.
Sheikh Khalifa bin Shakhbut (ruled 1833-1845) Repaired and fortified the fort.
Sheikh Saeed bin Tahnoon (ruled 1845-1855) Turned Qasr Al Hosn into a strong two-storied structure.
Sheikh Zayed bin Khalifa (ruled 1855-1909) Expanded Qasr Al Hosn further to reflect the emirate's increasing prominence.
Sheikh Shakhbut bin Sultan (ruled 1928-1966) Renovated and enlarged Qasr Al Hosn, adding a decorative arch and two new villas.
Sheikh Zayed bin Sultan (ruled 1966-2004) Moved the royal residence to Al Manhal palace and kept his diwan at Qasr Al Hosn.
Sources: Jayanti Maitra, www.adach.ae
Jetour T1 specs
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How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
Gully Boy
Director: Zoya Akhtar
Producer: Excel Entertainment & Tiger Baby
Cast: Ranveer Singh, Alia Bhatt, Kalki Koechlin, Siddhant Chaturvedi
Rating: 4/5 stars
Mohammed bin Zayed Majlis
The story in numbers
18
This is how many recognised sects Lebanon is home to, along with about four million citizens
450,000
More than this many Palestinian refugees are registered with UNRWA in Lebanon, with about 45 per cent of them living in the country’s 12 refugee camps
1.5 million
There are just under 1 million Syrian refugees registered with the UN, although the government puts the figure upwards of 1.5m
73
The percentage of stateless people in Lebanon, who are not of Palestinian origin, born to a Lebanese mother, according to a 2012-2013 study by human rights organisation Frontiers Ruwad Association
18,000
The number of marriages recorded between Lebanese women and foreigners between the years 1995 and 2008, according to a 2009 study backed by the UN Development Programme
77,400
The number of people believed to be affected by the current nationality law, according to the 2009 UN study
4,926
This is how many Lebanese-Palestinian households there were in Lebanon in 2016, according to a census by the Lebanese-Palestinian dialogue committee
UAE currency: the story behind the money in your pockets
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Electric scooters: some rules to remember
- Riders must be 14-years-old or over
- Wear a protective helmet
- Park the electric scooter in designated parking lots (if any)
- Do not leave electric scooter in locations that obstruct traffic or pedestrians
- Solo riders only, no passengers allowed
- Do not drive outside designated lanes
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Results
Men's finals
45kg:Duc Le Hoang (VIE) beat Zolfi Amirhossein (IRI) points 29-28. 48kg: Naruephon Chittra (THA) beat Joseph Vanlalhruaia (IND) TKO round 2.
51kg: Sakchai Chamchit (THA) beat Salam Al Suwaid (IRQ) TKO round 1. 54kg: Veerasak Senanue (THA) beat Huynh Hoang Phi (VIE) 30-25.
57kg: Almaz Sarsembekov (KAZ) beat Tak Chuen Suen (MAC) RSC round 3. 60kg: Yerkanat Ospan (KAZ) beat Ibrahim Bilal (UAE) 30-27.
63.5kg: Abil Galiyev (KAZ) beat Nouredine Samir (UAE) 29-28. 67kg: Narin Wonglakhon (THA) beat Mohammed Mardi (UAE) 29-28.
71kg: Amine El Moatassime (UAE) w/o Shaker Al Tekreeti (IRQ). 75kg: Youssef Abboud (LBN) w/o Ayoob Saki (IRI).
81kg: Ilyass Habibali (UAE) beat Khaled Tarraf (LBN) 29-28. 86kg: Ali Takaloo (IRI) beat Emil Umayev (KAZ) 30-27.
91kg: Hamid Reza Kordabadi (IRI) beat Mohamad Osaily (LBN) RSC round 1. 91-plus kg: Mohammadrezapoor Shirmohammad (IRI) beat Abdulla Hasan (IRQ) 30-27.
Women's finals
45kg: Somruethai Siripathum (THA) beat Ha Huu Huynh (VIE) 30-27. 48kg: Thanawan Thongduang (THA) beat Colleen Saddi (PHI) 30-27.
51kg: Wansawang Srila Or (THA) beat Thuy Phuong Trieu (VIE) 29-28. 54kg: Ruchira Wongsriwo (THA) beat Zeinab Khatoun (LBN) 30-26.
57kg: Sara Idriss (LBN) beat Zahra Nasiri Bargh (IRI) 30-27. 60kg: Kaewrudee Kamtakrapoom (THA) beat Sedigheh Hajivand (IRI) TKO round 2.
63.5kg: Nadiya Moghaddam (IRI) w/o Reem Al Issa (JOR).
Mohammed bin Zayed Majlis
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ARABIAN GULF LEAGUE FIXTURES
Thursday, September 21
Al Dahfra v Sharjah (kick-off 5.35pm)
Al Wasl v Emirates (8.30pm)
Friday, September 22
Dibba v Al Jazira (5.25pm)
Al Nasr v Al Wahda (8.30pm)
Saturday, September 23
Hatta v Al Ain (5.25pm)
Ajman v Shabab Al Ahli (8.30pm)
Killing of Qassem Suleimani
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The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
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UEFA CHAMPIONS LEAGUE FIXTURES
All kick-off times 10.45pm UAE ( 4 GMT) unless stated
Tuesday
Sevilla v Maribor
Spartak Moscow v Liverpool
Manchester City v Shakhtar Donetsk
Napoli v Feyenoord
Besiktas v RB Leipzig
Monaco v Porto
Apoel Nicosia v Tottenham Hotspur
Borussia Dortmund v Real Madrid
Wednesday
Basel v Benfica
CSKA Moscow Manchester United
Paris Saint-Germain v Bayern Munich
Anderlecht v Celtic
Qarabag v Roma (8pm)
Atletico Madrid v Chelsea
Juventus v Olympiakos
Sporting Lisbon v Barcelona
RESULT
Al Hilal 4 Persepolis 0
Khribin (31', 54', 89'), Al Shahrani 40'
Red card: Otayf (Al Hilal, 49')
No more lice
Defining head lice
Pediculus humanus capitis are tiny wingless insects that feed on blood from the human scalp. The adult head louse is up to 3mm long, has six legs, and is tan to greyish-white in colour. The female lives up to four weeks and, once mature, can lay up to 10 eggs per day. These tiny nits firmly attach to the base of the hair shaft, get incubated by body heat and hatch in eight days or so.
Identifying lice
Lice can be identified by itching or a tickling sensation of something moving within the hair. One can confirm that a person has lice by looking closely through the hair and scalp for nits, nymphs or lice. Head lice are most frequently located behind the ears and near the neckline.
Treating lice at home
Head lice must be treated as soon as they are spotted. Start by checking everyone in the family for them, then follow these steps. Remove and wash all clothing and bedding with hot water. Apply medicine according to the label instructions. If some live lice are still found eight to 12 hours after treatment, but are moving more slowly than before, do not re-treat. Comb dead and remaining live lice out of the hair using a fine-toothed comb.
After the initial treatment, check for, comb and remove nits and lice from hair every two to three days. Soak combs and brushes in hot water for 10 minutes.Vacuum the floor and furniture, particularly where the infested person sat or lay.
Courtesy Dr Vishal Rajmal Mehta, specialist paediatrics, RAK Hospital
KILLING OF QASSEM SULEIMANI
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Zayed Sustainability Prize
Match info
Karnataka Tuskers 110-3
J Charles 35, M Pretorius 1-19, Z Khan 0-16
Deccan Gladiators 111-5 in 8.3 overs
K Pollard 45*, S Zadran 2-18