Birkenstock Takes A Step Toward Wall Street After 'Barbie Bump': IPO Plans Unveiled
Birkenstock is one of the most popular shoe brands in the world, recently catapulting to fame after its cameo in the blockbuster "Barbie" movie.
The luxury German shoe brand, valued at an estimated $8 billion, made headlines earlier this month for planning an initial public offering (IPO) despite murky market conditions.
Backed By One Of The World's Richest Men
L Catterton, a private venture capital firm backed by Bernard Arnault's LVMH, gained an equity stake in Birkenstock Holding in 2021.
Birkenstock's back-to-nature philosophy has made it one of the most sought-after footwear brands among the elite opting for a minimalist look. At the time of LVMH's investment two years ago, Birkenstock was valued at $4.86 billion.
"Birkenstock was founded nearly 250 years ago and has grown to become one of the few iconic brands in the footwear industry. We truly appreciate brands with this long heritage," Arnault wrote in a statement.
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IPO Plans Despite Troubling Markets
As the IPO landscape gradually recuperates, Birkenstock is gearing up for an initial public offering on the New York Stock Exchange (NYSE). The German luxury shoe manufacturer filed the Form F-1 registration statement with the U.S. Securities and Exchange Commission (SEC) on Sept. 12, confirming its IPO plans.
According to insider reports, Birkenstock plans to raise funds at a valuation of $8 billion to $10 billion or more. The company is expected to accept investor orders as soon as Oct. 2. In addition, the luxury footwear brand is planning to tentatively schedule the offering to be priced on Oct. 10, with trading expected to commence on Oct. 11.
Despite the murky waters in the IPO landscape with companies that recently went public witnessing a slump in their share prices, Birkenstock's plans to proceed with its public offering reflect its resilience and leading market share.
"IPO investors right now are looking for something they're familiar with, something that is a little bit more predictable in these unusual times," Renaissance Capital's IPO analyst Angelo Bochanis said. "We haven't seen a whole lot of very flashy, preprofitable enterprise software companies go public. What we're seeing instead are names that people are familiar with, and business propositions that can really withstand these tougher environments, and Birkenstock fits the bill. I mean, it's nearly 250 years old. It's a company everyone knows."
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Robust Growth History
As one of the most popular luxury shoemakers in the world, Birkenstock has collaborated with prestigious names like Dior, Manolo Blahnik and Valentino while inspiring variations from brands such as Celine and Givenchy over the years. Established almost 250 years ago, Birkenstock's sandals have been available in the U.S. since 1966.
Despite the COVID-19 and recession-induced headwinds, Birkenstock's sales remained strong, with annual revenue surging from approximately $781 million in 2020 to more than $1.3 billion in 2022. This indicates a robust annual growth rate of 31%. For the six months ending on March 31, the company's net revenue increased by 19% to $692.9 million.
Birkenstock's direct sales channel has been rising, gaining significance for brands in a changing retail landscape and the era of e-commerce. Revenue from direct sales channels increased from 30% in fiscal 2020 to 38% in fiscal 2022, with a strong emphasis on the U.S. market.
Resilient Market Share
The company’s most significant recent marketing boost could be attributed to the brand’s Arizona sandal, which was featured in the billion-dollar blockbuster movie "Barbie."
The typical Birkenstock customer in the U.S. owns an average of 3.6 pairs of the company's footwear, as stated in its IPO prospectus. The global footwear market generates over $350 billion in annual retail sales, with the top five brands holding a 20% market share. Even though Birkenstock's current market share is less than 1%, the company forecasts plenty of room for expansion of its brand.
"Consumers buy our products for a thousand wrong reasons," Birkenstock's CEO Oliver Reichert wrote in the IPO prospectus. "But they all come back. ... Through the strong reputation and universal appeal of our brand — enabling extensive word-of-mouth exposure and outsized earned media value — we have efficiently built a growing global fanbase of millions of consumers that uniquely transcends geography, gender, age and income."
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