Alpargatas, the owner of the Havaianas and major investor in Rothy’s, is undergoing a compelling turnaround.
According to Pedro Baptista, Jefferies equity analyst for apparel, footwear and textiles in Latin America, the overhaul includes a full operational reintegration across production, logistics, digital, marketing and it global footprint.
Last June, Alpargatas shifted its operating model for Havaianas in North America when the São Paulo-based company inked a distribution deal with The Eastman Group for its flip-flops for the U.S. and Canada. The move shifted Alpargatas’ operating model from direct operation to distribution. In March 2025, Gigi Hadid was named Havaianas’ global brand ambassador.
The analyst said a few months later that the move would remove a long-standing drag profitability.
In his latest update, Baptista found that the back-to-basics strategy that included a focus on cutting stock-keeping units by half and prioritizing core high-volume model has “restored profitability to record levels, despite [still] lower volumes.”
The analyst said the firm has record profitability in Brazil, as Brazilian margins expanded 700 basis points. In addition, Havaianas’ domestic market share rose 170 basis points, “supported by stronger performance in specialized channels and selective expansion of owned stores and franchises.”
Elsewhere, the analyst also noted that Europe is returning to growth, with both volume and sales up 8 percent. And instead of being a drag on cash flow, the U.S. under its new distribution model is “set for its first recovery underpinned by operating leverage and disciplined simplification.”
Baptista added that Rothy’s is performing, but noted as he has in the past that the brand “could potentially be monetized.” He noted that revenue grew 15 percent in the third quarter, while EBITDA (earnings before interest, taxes, depreciation and amortization) reached $25 million from zero. Margins were strong, supported by manufacturing and logistics efficiencies and expanded distribution. In addition, Rothy’s opened four new stores, while also expanding sales in the B2B channel. While gross margins were impacted by higher tariffs on Chinese imports, it was still a solid 62 percent, Baptista noted.
“The company is exploring alternative suppliers outside of China to mitigate tariff risks,” the analyst noted, adding that the company is now operating “profitably” across its retail footprint.
“Alpargatas did not exercise its option [in 2025] to acquire the remaining 51 percent stake [in Rothy’s], preserving strategic flexibility and keeping monetization optionality alive,” Baptista noted. He estimated the value of Alpargatas’ stake in Rothy’s at $330 million.
Baptista also said that Itaúsa raised its stake in Alpargatas to 54.7 million preferred shares in December, representing 15.9 percent of the share class. “Itaúsa clarified that this move does not signal changes in governance or control structure; rather, it reflects confidence in Alpargatas’ long-term strategy despite short-term volatility,” Baptista said.
The analyst noted that Alpargatas’ controlling shareholders own 137.5 million preferred shares, or 40.03 percent of the share class.
