Birkenstock Owner Set for $8 Billion IPO in September

Birkenstock’s Wall Street Entry Sees 11.5% Drop

Despite The Initial Dip, The German Sandal Brand Still Holds A Substantial Market Capitalization Of $7.6 Billion

Birkenstock’s shares opened at $40.71 on the New York Stock Exchange on Wednesday, reflecting an 11.5% decrease from its initial pricing of $46 the previous evening. The company’s debut valuation positions it within the top echelons of footwear brands listed in New York.

The IPO pricing was set within the expected range of $44 to $49, targeting institutional investors who subsequently introduced the stock to the open market. Leading the offering were Goldman Sachs & Co., J.P. Morgan, and Morgan Stanley.

By market capitalization, Birkenstock ranks as the fourth-largest footwear company on Wall Street, trailing behind industry giants like Nike Inc. with nearly $150 billion, Deckers Outdoor Corp. at $13.2 billion, and On Holding at $7.9 billion, which also had its IPO last year.

Fear of God x Birkenstock

The ever-fluctuating market conditions mean Birkenstock and its CEO, Oliver Reichert, must now navigate the dynamic investor landscape.

The fashion sector faced some turbulence on the day of Birkenstock’s debut, especially as luxury stocks took a hit in Europe. LVMH Moët Hennessy Louis Vuitton, for instance, reported only a 1% rise in third-quarter revenues, leading to a 6.5% drop in its shares. Other luxury brands like Burberry Group and Brunello Cucinelli also experienced declines.

Although not positioned at the pinnacle of the luxury market, Birkenstock’s reputation in the high-end fashion realm has grown, thanks to collaborations with brands like Dior, Rick Owens, and Jerry Lorenzo’s Fear of God, and endorsements by figures like Manolo Blahnik.

Alexandre Arnault, executive vice president of products and communications at Tiffany & Co., and son of LVMH’s Bernard Arnault, sits on the Birkenstock board. He joined Reichert during the ceremonial ringing of the opening bell at the NYSE, where, in a unique move, traders donned Birkenstocks.

L Catterton, backed by LVMH, acquired Birkenstock in 2021 and, following the IPO, maintains control over 82.8% of the company. This acquisition, initially valued at roughly 4 billion euros, demonstrates Birkenstock’s significant growth— its revenues surged from 292 million euros in 2014 to 1.2 billion euros in the previous year.

Birkenstock’s recent offering amassed nearly $450 million. The company intends to use these funds to settle debts, including a vendor loan of about 100 million euros and 313 million euros owed under a senior term facility.