Birkenstock, the renowned German shoe manufacturer, initiates IPO, providing added momentum to the US market.

13 Sep, 2023

Birkenstock, the renowned German shoe manufacturer, initiates IPO, providing added momentum to the US market.

Birkenstock, the renowned German footwear manufacturer, has recently submitted an application for an initial public offering (IPO), underscoring the appeal that US equity markets hold for European companies seeking increased valuations.

According to a filing made on Tuesday, private equity firm L Catterton will retain control of Birkenstock, with the proposed terms of the share sale set to be disclosed in a subsequent submission to the US Securities and Exchange Commission.

Reports from Bloomberg News suggest that the IPO could potentially value Birkenstock at over $8 billion. The offering is being led by financial giants Goldman Sachs Group Inc., JPMorgan Chase & Co., and Morgan Stanley. This move comes more than two years after L. Catterton and the family investment firm of billionaire Bernard Arnault acquired a majority stake in Birkenstock, which valued the company at a substantial amount. around €4 billion ($4.3 billion).

Birkenstock's IPO filing joins a wave of listings in the US market, signaling a revival in the IPO landscape after a stagnant 18-month period. Other notable filings include those from SoftBank Group Corp.'s semiconductor designer Arm, grocery delivery firm Instacart Inc., and marketing and data automation provider Klaviyo Inc.

Birkenstock, with a history dating back nearly 250 years, revolutionized comfort with its contoured insoles. The brand gained widespread popularity in the 1970s, appealing to consumers from the US Southwest to Europe. Over time, Birkenstock has evolved into a high-fashion brand, engaging in collaborations with luxury labels like Dior, Manolo Blahnik, and Valentino, as well as inspiring variations from brands like Celine and Givenchy.

Tuesday's filing reveals that more than half (54%) of Birkenstock's customers are in the Americas, with Europe accounting for 36%. While 72% of customers are women, Birkenstock's appeal spans generations, with millennials representing 31% of sales, followed by baby boomers at 30%, Gen X at 27%, and Gen Z at 12%.

For the six months ending on March 31, the company reported a net profit of €40 million on revenue of €644 million, compared to €73 million in profit on revenue of €543 million during the same period the previous year.

Birkenstock has also made substantial investments in expanding its production facilities in Germany, including the construction of a new €120 million factory in Pasewalk, north of Berlin.

Upon completion of the IPO, the company will be known as Birkenstock Holding Ltd. and will list its shares on the New York Stock Exchange under the symbol BIRK. Chief Executive Officer Oliver Reichert emphasized the company's unique position, describing it as "the oldest startup on earth" with a rich tradition spanning a quarter of a millennium and a reputation for resilience, timeless relevance, and multi-generational credibility. Sales have also received a boost from Margot Robbie's endorsement of pink Birkenstocks in the blockbuster Barbie movie.