Birkenstock, the German sandal maker, has IPO-ed on the New York Stock Exchange at US$46, valuing the company at US$8.64 billion and raising an additional US$1.48 billion.
Marking the fourth big-name listing in the US in as many weeks following IPOs from Instacart (NASDAQ:CART), Arm and Klaviyo, Birkenstock, which is owned by L Catterton, will be trading under the BIRK ticker.
Michael Hewson, chief market analyst at CMC, said: “Since 2010 the company has diversified into sleep systems, as well as natural cosmetics however that remains a small part of the overall revenue stream, which is primarily derived from the sale of high-value sandals and clogs.
“The proceeds of the IPO will see some of the money returned to the private equity owners, with a third of the proceeds going to repay debt.”
UK trading platforms like Capital and Trading 212 are yet to begin executing trades but trading in New York has commenced and according to Market Watch shares are up 0.85%, although data is usually hazy in the first hours.
Birkenstock IPO. Source: the Independent
Interactive Investor’s head of investment Victoria Scholar has welcomed the IPO but is aware of some of the headwinds facing the shoe brand now that it is a listed stock.
Scholar said: “The highly popular footwear brand is having a major moment, appealing to fashionistas. The brand recognition should help the company to generate significant interest from retail investors.
“However, the risk with any fashion brand is whether it can sustain its popularity. With that in mind, it has been trying to diversify by expanding beyond shoes into bags as well. The volatile equity market environment is also another headwind to contend with.”
Birkenstock's approach has been bolstered by strong early investor interest with LVMH shareholder Financiere Agache expressing interest in purchasing US$325 million worth of shares, while Durable Capital Partners and Norges Bank Investment Management are considering building a stake worth US$300 million, the retailer revealed in a filing.