Update: On Tuesday evening, Birkenstock was valued at $8.6 billion USD, with the shares priced at $46 USD. After it hit Wall Street, the German sandal brand’s stocks fell 11.5% to $40.71 USD in just its first few minutes of trading. The company still has a hefty capitalization of $7.6 billion USD, but the early dip took the momentum out of the IPO market.
Priced at $40.71 USD, the stock falls below the targeted $44 to $49 USD range. By market capitalization, Birkenstock is the fourth-largest footwear company traded in New York and now sits behind Nike Inc. which is at nearly $150 billion USD. While the company does not operate at the peak of the luxury market, its sandals are priced at a premium with collaborations with the likes of Dior, Rick Owens and Manolo Blahnik, just to name a few. The luxury stock market has a seen a retreat in Europe after LVMH posted a 1% gain in its Q3 revenues with shares falling 6.5%.
Birkenstock has plenty of luxury friends, with Alexandre Arnault, son of LVMH chief Bernard Arnault and the company’s VP of products and communications at Tiffany & Co., sitting on the Birkenstock board. Arnault waved a sandal to the right of Birkenstock CEO Oliver Reichert when the bell rung on the the New York Stock Exchange. Now, Birkenstock must adhere to the company’s value, determined by the fluctuation based on moment-to-moment movements from investors.
Original Story: Birkenstock has stepped onto the New York Stock Exchange with a $8.6 billion USD valuation. The German sandal maker is priced at $46 USD a share for its IPO, which is within the $44 to $49 USD range that was previously predicted. This marks official price that institutional investors are willing to pay before they begin selling the stock on open market and placing the value of the almost two and a half century old sandal company in the hands of the market.
The high-profile stock is slated to set the precedent for other consumer companies looking to go public. If it bodes well, it might set the pace for other brands like Kim Kardashian‘s Skims which are also looking to go public. The previous wave of IPOs did not do too well with companies like Allbirds Inc. and Rent the Runway Inc. hit the market. at a peak and many investors bet on the the brand’s growth. With many of the bets not working out, it signalled that investors were ultimately looking for companies that are a bit more old-fashioned on the bottom line and of course, making money. Birkenstock seems to fit the bill.
Birkenstock’s adjusted profits for the nine months ended June 30 saw it increase 47% to €182 million EUR with revenues increasing 21% to €1.1 billion USD and a 5% increase with the number of units sold. The stock has begun trading under BIRK starting today.
In case you missed it, here is an official look at the Nike Sabrina 1 “Grounded.”