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Sustainability is coming for every industry, from the top of the highest skyscraper to the shoes on our feet. Rothy’s is one brand that has taken the footwear industry by storm since it was founded by Stephen Hawthornthwaite and Roth Martin in 2012 to create a sustainable product. Since then, it has expanded its merchandise beyond shoes into handbags and wallets. Its geographic footprint has surged beyond San Francisco to eight brick-and-mortar stores in Los Angeles, Chicago, New York, Boston, and Washington, D.C. In addition to digital sales, the brand has an international reach that includes Brazil and countries in Asia and Europe. This large reach has won the hearts of over two million customers, including Meghan Markle. Last month, the adventure took another turn when Brazilian footwear and apparel conglomerate Alpargatas S.A. decided to buy a stake in Rothy’s.  

Roth Martin and Stephen Hawthornthwaite. Image provided by Rothy’s. 

Rothy’s sustainability efforts start with their materials and vertically integrated supply chain.

Their thread incorporates single-use plastic water bottles – and they have kept over 100 million bottles and 275,000 pounds of plastic out of the ocean since 2016. Their Strobel boards are made of algae-based foam, which is renewable and prevents the algae from dominating the ecosystem. Their insoles include recycled rubber and plant-based oils. All Rothy’s products are “knit to shape” in their factory so production waste is 30 percent lower. Rothy’s is committed to achieving zero waste by 2022, and circular production and carbon neutrality by 2023. Steps in this direction have already begun with a recycling pilot program last year that collected 1,500 pairs of returns and tested ways to take apart and reuse them. Hawthornthwaite reflects that, “[w]e 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.”

Rothy’s materials grid. Image provided by Rothy’s. 

As Rothy’s continues its journey, Alpargatas seems to be a natural partner. Alpargatas manufactures the lifestyle and flip-flop brand Havaianas, selling more than 260 million pairs in over 130 countries each year, with a strong presence in Brazil, where it runs six factories. This global presence, plus their investment dollars, will enable Rothy’s to continue innovating across products and sustainability, promote its brand, expand operations, and build more brick-and-mortar retail stores

Rothy’s COO Heather Skidmore Howard told Footwear News that expanding physical store presence in cities like Atlanta and Scottsdale would take priority in 2022, as they are “eager to provide more ways for our community to shop by offering the ease and convenience of a physical store in addition to our online storefronts.” 

Rothy’s factory team. Image provided by Rothy’s. 

The investment comes in a two-part structure. Alpargatas is paying $200 million in cash upfront, followed by acquiring $275 million of Rothy’s shares from existing stockholders. At the end of the day, Alpargatas has a 49.9 percent stake in Rothy’s, and Rothy’s is valued at $1 billion. Rothy’s will continue operating independently under the control of Hawthornthwaite and Martin who kept significant stakes. However, the board of Rothy’s has grown to include nine directors, with four representing Alpargatas, including Roberto Funari, its CEO, and Stacey Brown, an independent member of its own board. Additionally, Alpargatas will have a call option to purchase more shares of Rothy’s between December 20, 2022 and December 20, 2025, the first and fourth anniversaries of the transaction. 

Why is Alpargatas so interested in Rothy’s? The company is eager to expand its footwear options, and Rothy’s has successfully done so. Rothy introduced men’s loafers last year and that quickly became their “most requested category to date.” And like Rothy’s, Alpargatas wants to reach new markets, as Funari elaborated, “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.” 

It is hard to imagine that the sustainability efforts at Rothy’s did not have something to do with it. Their emphasis on recycling and giving back to nonprofits could also have been a draw. Regardless, Rothy’s and Alpargatas truly seem to have been made for each other. 

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