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Fire Shuts Down Alpargatas Footwear Factory in Brazil

A major fire at a Brazilian factory owned by footwear maker Alpargatas destroyed an entire section of machinery but no casualties were reported.

Some 50 firefighters and military personnel and 10 vehicles responded to the Monday morning blaze in Santa Rita, located about 1,500 miles northwest of Rio de Janeiro, according to published reports.

Firefighters were able to isolate the fire to one shed where most of the machinery used for injection molding parts was destroyed.

Because the blaze broke out at about 4:30 a.m., no employees were in the building. The next shift for 700 workers started at 5:30 a.m., said Alpargatas, owner of the Havaianas sandal brand.

The factory accounted for less than 3 percent of the company’s total volume. Alpargatas owns and operates six factories in Brazil.

“So far, we have not identified victims or injuries to persons, and the physical integrity of the employees has been preserved. They were released before the beginning of their work shift at the plant,” said Maria Rita Teixeria, a spokeswoman for the Brazilian company, in an email.

She noted the company was assessing the losses and material damage that took place while activating its insurance.  Firefighters have not determined what caused the blaze.

The fire came just days before Alpargatas was set for a follow-on offering of 37.5 million new common shares and 57.5 million new preferred shares to raise money for its partial acquisition of Rothy’s, a San Francisco company that makes shoes and accessories primarily from recycled ocean plastic. On Feb. 23, the Brazilian company announced it would offer common and preferred shares at $5.14 a share via Banco Itau BBA, Bank of America, JPMorgan, Bredesco Bbi and Citigroup Global Markets.

Rothy’s does not make its shoes in Brazil but in its own 300,000-square-foot plant in Dongguan, China, said Anna Doré, the senior communications manager for Rothy’s. Nor does the San Francisco company have any plans to do so.

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Alpargatas’ deal with Rothy’s, announced on Dec. 20, 2021, is for a 49.9 percent portion of the Bay Area company, which makes shoes from recycled plastic water bottles and marine plastic taken out of waterways.

For its investment in Rothy’s, Alpargatas planned to acquire shares worth $200 million, followed by a tender offer to acquire stock worth about $275 million from current Rothy’s shareholders.

Rothy’s, which will have a post-investment valuation of $1 billion with the transaction, will continue to operate independently, the companies said.

With most of its customers in the United States, 98 percent of Rothy’s sales come from online sites. With the Alpargatas investment, Rothy’s said it can consider expanding to Asia, Europe and Brazil.

The San Francisco footwear firm was founded in 2012 by CEO Stephen Hawthornthwaite, and Roth Martin, the company’s president, as a digital enterprise to create a sustainable shoe.

The two entrepreneurs used a combination of fashion, footwear sustainability and knitting to create a woman’s shoe that has transformed 100 million single-use plastic water bottles into machine-washable shoes. The company has since expanded into men’s, children’s and accessories with shoes retailing at $125 to $185.

The two Rothy’s founders are expected to continue to oversee operations. In a Feb. 11 conference call with analysts, Alpargatas CEO Roberto Funari said Hawthornthwaite and Martin had visited Brazil this month to check out the Alpargatas operations, but Funari declined to outline steps that will be taken to boost Rothy’s sales.

Alpargatas, based in Sao Paolo, is named for a type of cotton and jute espadrille that has been popular in Spanish-speaking countries for centuries. Most recently, the Brazilian company is better known for its Havaianas, a rubber-soled flip flop marketed for $25 to $30 in more than 130 countries, helping Alpargatas reach $780.5 million in revenues last year.