- German sandal maker Birkenstock (NYSE:BIRK), which initially made its name in orthopedic shoes, is finally ready to IPO on a major global stock exchange
- Approximately 32.2 million shares priced at US$46 will be on offer for public investors, which could raise around US$1.48 billion for the company and value it at just over US$8.5 billion
- The company’s multi-generational history since its founding in 1774 holds promise to rise above recent less-than-stellar IPOs from Instacart, Arm Holdings and Kellogg
German sandal maker Birkenstock (NYSE:BIRK), which initially made its name in orthopedic shoes, is finally ready to IPO on a major global stock exchange.
The company, founded in 1774 and known for its flexible shoes contoured to the foot, made its way to the United States in the 1960s, where its sandals quickly became a working-class badge for the hippie generation.
It took until the 1990s for Birkenstocks to appeal to the rich and famous after supermodel Kate Moss wore a pair for a fashion shoot, a landmark moment that eventually led to the likes of Paco Rabanne, Valentino and Celine releasing custom Birkenstocks, and socialites such as Kendal Jenner and Gigi Hadid elevating the brand’s visibility. The shoe company even made an appearance in the Barbie movie, where actress Margot Robbie can be seen wearing a pink pair.
Birkenstock now employs approximately 6,200 people worldwide, but has remained true to its German roots by manufacturing 95 per cent its products at several sites across the country, despite the availability of cheaper labour overseas.
With the spotlight firmly centred on its comfortable, unassuming footwear, the company will continue its centuries-long history with an NYSE listing to enhance its valuation and optimize its access to capital markets, with proceeds from the offering going primarily toward debt repayments.
Approximately 32.2 million shares priced at US$46 will be on offer for public investors, which could raise around US$1.48 billion for the company and value it at just over US$8.5 billion.
Birkenstock is controlled by private equity group L Catterton and the family holding fund of Bernard Arnault, the founder, chairman and CEO of Louis Vuitton Moët Hennessy. Under their guidance, the company posted €1.11 billion in revenue in the nine months ending June 30, 2023, up 21 per cent YoY, with net income of €129.1 million, down 20 per cent YoY.
Revenue rose from €728 million to €1.24 billion between fiscal 2020 and 2022 because of a shift to a direct-to-consumer strategy, a reduction in wholesale and a focus on higher price points. Net income was €187 million in fiscal 2022. The company’s fiscal year ends in September.
Birkenstock’s current relevancy stands in stark contrast to global pressure on consumer spending because of inflation and high interest rates, which motivate a shift toward long-term savings.
Investors will be keeping a close eye on the stock, and whether its well-established reputation can save it from another mediocre debut this IPO season, as has been the case with Instacart, Arm Holdings and Kellogg.
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