Completing its reorganization, Alpargatas is divesting its 60 percent stake in Osklen, a Brazilian brand of sustainable surf- and skate-inspired clothing and footwear, to focus on Havaianas, the big international brand of rubber sandals. Alpargatas had already transferred its regional Mizuno license to Vulcabras, parent company of Olympikus, in the summer of 2019. In the meantime, Vulcabras has also taken on a license for Under Armour.
The buyer for Osklen is Dass Nordeste Calçados e Artigos Esportivos, a big Brazilian manufacturer of sports shoes that is already the licensee for Umbro since 1999 and Fila since 2003. Supported by Brazil’s anti-dumping duties on shoes imported from China, the Dass Group also acts as a local supplier of shoes for Nike, Adidas, Asics, Under Armour, Reebok, Puma and Mizuno.
Dass has agreed to pay 400 million Brazilian reais (€63.6m-$73.4m) for Osklen, including a variable earnout of R$ 100 million in 2022 and 2023. The balance will be paid in three installments. Alpargatas said the sale will help finance a previously planned investment of R$ 600 million (€95.2m-$110.1m) next year to expand its own manufacturing capacity and the logistics network to support the growth of Havaianas and the brand’s expansion into new categories.
Osklen was founded as a brand of sportswear and surfing accessories in 1989. Alpargatas bought its controlling stake in Osklen for a reported R$ 318.2 million (€50.5m-$58.3m) in two stages in 2012 and 2014. Since then, Alpargatas’ ownership has moved from Camargo Correa to J&F Investimentos, and then over to Itausa.
Osklen has been making a relatively minor contribution to Alpargatas’ revenues, which increased in the third quarter by 12.7 percent to R$ 1,063 million (€163.1m-$188.6m). Havaianas grew by 9.4 percent to R$ 976.3 million (€149.8m-$173.2m), with gains of 9.8 percent in Brazil to R$ 742.3 million (€113.9m-$131.7m) and 8.3 percent in the rest of the world to R$ 234.0 million (€35.9m-$41.5m).
To oversee Havaianas’ expansion, Alpargatas has created a “growth” department that will be responsible for developing Havaianas’ “Beyond Core” product range in Brazil and abroad, with the aim of turning Havaianas into a broader lifestyle brand. The new division is headed by Leandro Medeiros, who has been with the company since 2019. In the third quarter, the Beyond Core business doubled its revenues compared with the previous year, with half of its sales stemming from sandals.
At the end of August, Alpargatas launched a collection of sneakers in Brazil under the label Havaianas TNS. It is now available in over 400 points of sale and is already among the brand’s ten best-selling products. The sneakers will be gradually rolled out worldwide and are scheduled to reach Europe in the spring of 2022.
Alpargatas also appointed Maria Fernanda Albuquerque as vice president of global marketing for Havaianas, effective Nov. 1. She was previously director of branding and global communication.
In the third quarter, Alpargatas’ overall gross margin fell by 2.9 percentage points to 49.4 percent. Havaianas’ gross margin slipped by 3.1 percentage points to 48.3 percent, but its international division registered a 4.3 percentage point increase to 69.9 percent.
The recurring Ebitda margin for the group widened by 0.7 percentage points to 17.5 percent, with Havaianas down by 0.9 points to 18.2 percent, but Havaianas International swung to a positive 1.5 percent margin from a negative 2.4 percent.
The net profit attributable to the parent company surged by 2,814 percent to R$156.3 million (€24.0m-$27.7m) while the recurring net profit increased by 25.8 percent to R$154.0 million (€23.6m-$27.7m).
