The News
Birkenstock, the German shoemaker known for producing cork-soled sandals worn by California hippies and Steve Jobs before taking the fashion world by storm, raised about $1.48 billion in an initial public offering, the company said on Tuesday. Birkenstock set the price of its shares at around the middle of the range it said earlier this month it was seeking, valuing the company at more than $9 billion.
Background: From hippies to hipsters.
Birkenstock traces its founding to 1774. The sandals became popular during the 1960s, but it was not until two years ago — when the family-owned company was acquired by the private equity firm L Catterton and the family investment company of Bernard Arnault, the French billionaire behind the luxury conglomerate LVMH — that it broke into the mainstream. Collaborations with prominent shoe designers, including Christian Dior, Manolo Blahnik and Valentino Garavani, have generated buzz and drove sales to 1.24 billion euros ($1.3 billion) in 2022, from €292 million in 2014, according to the company’s filing.
What the analysts say: Birkenstock faces a challenging market.
Analysts warn that the company, which aims to expand its business in Asia and the United States, is entering a challenging market at a difficult moment. A cost-of-living crisis has forced consumers to rein in spending on fashion items.
Birkenstock is the latest shoe company to go public in recent years. But most, including AllBirds, Dr. Martens and On Holding, the company behind On Running sports shoes, have seen their market value fall since they entered the stock market in 2021.
On top of that, other recent I.P.O.s, including Arm Holdings and Instacart, have seen their stock prices fall significantly in the weeks after going public, warned David Trainer, chief executive of New Constructs, an investment research firm in Nashville.
What happens next: The stock will begin trading on Wednesday.
Birkenstock is listing its shares on the New York Stock Exchange under the ticker symbol BIRK, and trading is expected to begin on Wednesday. The company priced its shares at $46 each; Birkenstock had earlier said it expected to set the price between $44 and $49, but the stock could open for trading at a different price. It sold just over 32 million shares in the offering.
