Written by: Susannah Streeter | Hargreaves Lansdown
- Birkenstock has filed for an IPO on NYSE under the symbol "BIRK”.
- IPO expected in week commencing 9 October 2023.
- Price range expected to be set giving the firm a valuation of between $6 billion and $8 billion.
As fashion fans have jumped feet first into the Birkenstock brand, it has propelled the company to step into a listed future. The sandals once famous for their hippy associations, with an emphasis on foot friendly comfort, are now chic essentials for the super-stylish set. They’ve taken off on TikTok, and the Boston Clog models - named as last Autumn’s ‘It Shoe’ - sold out fast. By breaking into new fashion circles whilst maintaining the iconic design, sales have surged and clearly the company wants to capitalise on being in the fashion spotlight. Although a price range for the company hasn’t yet been set, it’s expected to give the company a valuation of between $6 and 8 billion dollars, depending on the interest in the IPO.
With the Arm IPO expected on Thursday and Instacart confirming its listing plans – Birkenstock’s step shows that the IPO engine is whirring back to life after an 18-month downturn. Hopes that the end of the interest rate hiking cycle is in sight is also driving more confidence. The decision by Birkenstock to launch in the US is a further blow to London as a listing venue, as it isn’t expected to host any high-profile IPOs for the rest of the year. It’s also a bit of a snub to Frankfurt, where fresh signs of IPO life had been springing up after Renk Group, which manufactures components for the defence and energy sectors, and Schott Pharma said they intend to list before the end of the year. Some companies are still wary of cautious sentiment, particularly for stocks sensitive to consumer demand and are hoping a New York listing will provide more ballast, whereas there still appears to be a willingness to take a chance elsewhere for more defensive sectors.
Birkenstock may have had its eye on the unhappy trajectory of Dr Martens since its listing in London. DOCS shares have fallen 66% since the IPO in 2021, which was partly a function of a frothy valuation, but also raises questions about the long-term growth trajectory for the famous shoe brand, which has been beset by distribution problems.
Fashionistas are fickle and while Birkenstock may be basking in rays of popularity right now, it’s going to have to run fast to keep up in the stylish stakes. Counterfeit goods could also cause the company to lose its footing in the fast-moving fashion environment. The company has flagged competition from knock offs as a risk in its prospectus. The worry is that if too many fake products flood the market, not only could that affect sales, it could also affect the prestige tag of the brand, and push it out of fashion.