Birkenstock, a well-known German footwear company famous for its cork-soled sandals, previously adored by California hippies and iconic figures like Steve Jobs, has successfully completed its initial public offering, generating approximately $1.48 billion, as officially announced by the company on Tuesday. The IPO saw Birkenstock pricing its shares at a level close to the midpoint of the range it had previously indicated earlier in the month. This pricing values the company at over $9 billion, marking a significant milestone in its journey.
Analysts’ Verdict: Birkenstock Uphill Battle in a Challenging Market
Industry experts caution that Birkenstock, as it endeavours to expand its presence in Asia and the United States, faces a formidable challenge given the current economic landscape. A growing cost-of-living crisis has prompted consumers to tighten their purse strings, leading to reduced spending on fashion-related items.
Notably, Birkenstock joins a string of footwear companies that have taken the public route in recent years. However, many, including AllBirds, Dr. Martens, and On Holding, the parent company of On Running sports shoes, have observed declines in their market value following their IPOs in 2021.
Adding to the concerns, recent initial public offerings (IPOs), such as Arm Holdings and Instacart, have experienced substantial stock price declines in the weeks immediately post-offering, as emphasized by David Trainer, the CEO of New Constructs, an investment research firm based in Nashville.
Looking ahead, Birkenstock will commence trading on Wednesday. The company has chosen to list its shares on the New York Stock Exchange under the ticker symbol “BIRK,” and trading is scheduled to begin on Wednesday. While Birkenstock initially suggested an expected share price range of $44 to $49, they ultimately set the final offering price at $46 per share, with the potential for the stock to open for trading at a different price In the offering, Birkenstock successfully sold slightly over 32 million shares.