Birkenstock is going public – but is exercising caution. The traditional sandal manufacturer from Germany is holding back on the price of its shares for the IPO in New York. Birkenstock set the share price at $46 – in the middle of the $44 to $49 range. The share placement will bring in just under $1.5 billion (around €1.4 billion). About two thirds of this go to the main owner L Catterton, who is linked to the luxury group LVMH and whose billionaire boss Bernard Arnault.
Birkenstock, headquartered in Linz am Rhein in Rhineland-Palatinate, is worth around 8.6 billion dollars (around 8.1 billion euros) at its stock market debut. L Catterton will retain control of Birkenstock after the IPO. The stock will begin trading on the New York Stock Exchange on Wednesday under the symbol “BIRK.” Birkenstock wants to use its share of the proceeds from the IPO to reduce debt.
With the plans, Birkenstock is jumping on a wave of activity on the US stock market after more than a year of standstill. In the past few weeks, the chip designer Arm and the delivery service Instacart, among others, went public. They set the issue price at the upper end of the price range. However, the shares were unable to maintain their initial price gains. The Arm share was recently trading well below its current highs, and the Instacart price fell below the issue price.
According to the company, Birkenstock’s origins date back to 1774. Almost 250 years ago, the shoemaker Johannes Birkenstock laid the foundation for “a shoemaking dynasty”. The company describes itself as the “inventor of the footbed”. The sandals have long since broken away from their former eco-slipper image; in recent years they have increasingly developed into a fashion accessory, also through collaborations with high-end brands such as Dior and Manolo Blahnik.
In the first half of the current financial year, which ended at the end of March, Birkenstock increased sales by 18.7 percent to around 644.2 million euros. The bottom line is that a profit of 40.2 million euros remained in the books, after around 73.5 million euros a year earlier. The decline was primarily due to unfavorable exchange rates. Birkenstock ended the last financial year with sales of 1.24 billion euros and a profit of 187 million euros.
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