Birkenstock Targets $10 Billion Mark for Wall Street Debut

The renowned German shoe brand, Birkenstock, backed by L Catterton, a private-equity heavyweight, is setting its sights on an approximate valuation of $10 billion as it preps for its U.S. initial public offering (IPO).

According to a recent disclosure to the U.S. Securities and Exchange Commission, both the firm and its shareholders intend to offload a minimum of 32 million shares, with individual share prices expected to fall between $44 and $49. This could see the company raising a maximum of $1.58 billion. In recent times, Birkenstock has gained immense global popularity, especially after its shoes made an appearance in the hit “Barbie” film.

This move comes at a time when the IPO scene is witnessing a rejuvenation after a two-year lull, albeit with mixed success for some notable entrants like Arm and Instacart.

“Given the persistent high interest rates, investor mood remains on edge,” remarked Susannah Streeter from Hargreaves Lansdown. “So, while Birkenstock sets lofty goals, the final listing price might lean towards the middle or even lower end, publicity notwithstanding.”

On another note, efforts to stave off a U.S. government shutdown could ensure the securities regulator remains sufficiently staffed to oversee future filings, potentially boosting the IPO sector.

Birkenstock has chosen ‘BIRK’ as its ticker symbol for its New York Stock Exchange listing. Furthermore, Alexandre Arnault, belonging to the influential LVMH Arnault clan, has been nominated for a board position. The company also shared that Financière Agache, an entity under the Arnault family’s control, plans to purchase ordinary shares worth $325 million during the offering.

Separate interests from Durable Capital Partners LP and Norges Bank Investment Management funds have also emerged, aiming to acquire shares totaling $300 million.

Barbie Trend

Historically, Birkenstock’s appeal lay in comfort over style. However, the brand’s recent feature in “Barbie”, showcasing lead Margot Robbie wearing pink Birkenstocks, has boosted its fashion reputation.

“Though currently enjoying the limelight, Birkenstock will need to stay agile to remain fashionable. Fake products might also trip the brand in the dynamic fashion world,” added Streeter.

Last month’s reports highlighted a 21% surge in Birkenstock’s revenue for the nine months ending June 30, a remarkable feat given the challenging luxury goods market influenced by cost-conscious consumers.

Dating back to 1774, Birkenstock, a six-generation family venture, has collaborated with iconic names like Dior, Manolo Blahnik, and Rick Owens.

Post-IPO, L Catterton will retain around 83% ownership in Birkenstock, with the raised funds being used to clear debts.

Top financial institutions including Goldman Sachs, J.P. Morgan, and Morgan Stanley are orchestrating the IPO process.