Brazilian company Alpargatas, widely recognized for its popular Havaianas flipflop brand, has recently announced a significant investment in sustainable footwear brand Rothy’s, which is based in San Francisco. The deal consists of two components. Firstly, Alpargatas will make a primary capital investment of $200 million. Following this, they will offer roughly $275 million to purchase existing Rothy’s shares from current shareholders. Once the agreement is finalized, Alpargatas will own 49.9% of Rothy’s and will have the option to acquire more shares in the future. This investment will effectively raise Rothy’s valuation to a staggering $1 billion.

Rothy’s was founded in 2012 by Stephen Hawthornthwaite and Roth Martin, with the primary aim of manufacturing comfortable and stylish footwear using recycled materials and innovative knitting techniques that minimize waste. As a result, the brand has repurposed over 100 million single-use plastic bottles into shoes. Rothy’s has also expanded its product line to include men’s footwear and accessories. The company primarily sells its products online, with digital channels accounting for 98% of its sales.

With the support of Alpargatas, Rothy’s endeavors to accelerate its brand and retail expansion strategy. One of the key objectives is to venture into international markets such as Asia, Europe, and Brazil. Additionally, the investment will be utilized to enhance the manufacturing operations at Rothy’s dedicated facility, comprising an impressive 300,000 square feet, located in Dongguan, China.

Rothy’s perceives the partnership with Alpargatas as an opportunity to align itself with an industry leader that shares its values of sustainability and a people-centered approach. Alpargatas, which currently operates six factories in Brazil, places great emphasis on its strategic pillars of global reach, digital innovation, and sustainability, all of which align with Rothy’s objectives.

Following the completion of the transaction, Rothy’s founders, Hawthornthwaite and Martin, will remain actively involved in managing the company and will continue to hold a significant proportion of equity. Alpargatas’ CEO, Roberto Funari, and independent board member, Stacey Brown, will join Rothy’s board, which will expand to nine seats, with four seats reserved for Alpargatas.

This investment holds great significance for Alpargatas as it provides an opportunity to further its global strategy and gain relevance in the North American market. On the other hand, Rothy’s will benefit from Alpargatas’ extensive experience, scale, and resources, while maintaining its commitment to sustainability and innovative manufacturing practices.

In addition to Alpargatas, other existing investors such as Lightspeed Ventures will also retain a considerable equity stake in Rothy’s following the transaction. The collaboration between Alpargatas and Rothy’s underscores the increasing demand for sustainable footwear and highlights the potential for cooperation between traditional footwear brands and pioneering startups in the industry.

Useful Links:
1. Alpargatas Brands
2. Rothy’s Official Website