‘Barbie’ buzz propels Birkenstock IPO
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‘Barbie’ buzz propels Birkenstock IPO

May 18, 2023

Birkenstock sandals are either loved or hated. And the eternal dilemma among fans of the footwear is whether to wear them with socks or without. The products made by the historic orthopedic shoe company, whose origins are an artisanal, family-run business, have become a trend over the years, with generation following generation. Birkenstocks have even found their way onto the feet of actress Margot Robbie in the blockbuster Barbie movie. Now, the other current challenge facing the company is its IPO. L Catterton, a private equity firm backed by LVMH, has majority-owned the firm since 2021 and plans to make the leap in September with an initial public offering of about $8 billion, according to Bloomberg.

The operation, which is being advised on by Goldman Sachs and JP Morgan, could see the German sandal maker reach a value of $10 billion. So far, however, no final decision has been taken on the valuation and the IPO date, as cited by Bloomberg.

The company’s sales have rebounded after Robbie wore Birkenstock Arizona sandals — pink of course — in a scene in the movie directed by Greta Gerwig. In fact, Google searches for these shoes spiked between July 20 and 21, the dates of the film’s release in several countries. Last year, the German firm’s revenues rose 29% to around €1.2 billion euros ($1.31 billion), with adjusted earnings of €394m ($431.5m). Birkenstock has been investing in the expansion of its production sites in Germany, especially in a new factory in Pasewalk, a town north of Berlin.

The historic German firm first came into being in 1774, but its first product was marketed in 1963. Since then, it has launched collaborations with luxury names such as Dior, Valentino and Manolo Blahnik, and its shoes have become a fashion staple for customers of all ages.

The proposed IPO comes more than two years after L Catterton, LVMH and Groupe Arnault, the family investment company of billionaire Bernard Arnault, acquired a majority stake in the business, valuing it at about $4.9 million. Brothers Christian and Alex Birkenstock retained a minority stake in the company.

The German firm’s debut would help offset weak activity this year. According to EY, in the first six months of 2023, global IPO volume fell 5% to 615 while proceeds were down 36% ($60.9 billion). The Americas was the most active region, raising $9.1 billion. In Europe, just $12.4 billion was raised in 167 deals.

Birkenstock products are sold in 90 countries around the world and the company, in addition to eight sites in Germany, has distribution subsidiaries in the United States, Brazil, China, Hong Kong, Japan, Denmark, Slovakia, Spain and the United Kingdom.

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