Birkenstock to List on NYSE Following $1.5 Billion IPO
Birkenstock’s Valuation Soars to $9.3 Billion in US IPO
LVMH-backed Birkenstock, the renowned German luxury sandal manufacturer, is set to make its debut on the New York Stock Exchange. The company achieved a valuation of $9.3 billion after its successful initial public offering (IPO) in the United States. The IPO raised $1.48 billion by offering 32.3 million shares at a conservative price of $46 per share, positioning the 250-year-old brand for a smooth market entry.
Investor Caution as Birkenstock Sets IPO Price
Analysts note that investors approached Birkenstock’s IPO with caution, as the share price of $46 fell within the mid-range of the initial price range. Susannah Streeter, Head of Money and Markets at Hargreaves Lansdown, suggests that investors may have reservations about the brand’s future prospects. However, despite these concerns, Birkenstock’s high level of profitability could work in its favor, particularly in an environment of rising interest rates.
A Recent Wave of IPOs
Birkenstock is the latest in a series of major companies to launch an IPO in the US market. This trend includes chip designer Arm Holdings, grocery delivery app Instacart, and marketing automation platform Klaviyo. While these companies experienced strong initial performances, their shares have since fluctuated, creating uncertainty in the IPO market.
Birkenstock’s Financial Performance
Birkenstock reported a 21% increase in revenue, reaching 1.12 billion euros ($1.19 billion) for the nine-month period ending June 30. However, its net profit for the same period declined by 20% to 103.3 million euros. Despite this, Birkenstock remains an attractive investment due to its long-standing profitability and partnership deals with luxury fashion brands like Dior, Stüssy, Manolo Blahnik, and Rick Owens.
Future Outlook and Investor Sentiment
The movie “Barbie” featuring Australian actress Margot Robbie wearing pink Birkenstocks has generated significant interest in the brand. Investors anticipate this excitement may translate into demand for the stock. However, some experts suggest that the stock may not immediately attract retail investors due to the lack of market-related factors associated with meme stocks and the cautious approach investors have adopted following previous IPOs and SPACs.
L Catterton Retains Majority Stake
L Catterton, backed by French luxury goods empire Louis Vuitton Moet Hennessy, will continue to own nearly 83% of Birkenstock. The private equity firm acquired its stake at a valuation of approximately $4.3 billion, further solidifying its commitment to the brand.
Goldman Sachs, JPMorgan Chase, and Morgan Stanley Lead Underwriters
The IPO was underwritten by leading financial institutions, including Goldman Sachs, JPMorgan Chase, and Morgan Stanley, further emphasizing the confidence in Birkenstock’s market potential.
With a successful IPO and strong financial performance, Birkenstock is well-positioned to make its mark on the New York Stock Exchange and continue its legacy as a renowned luxury footwear brand.
