When German shoemaker Birkenstock stock makes its public market debut Wednesday (Oct. 11) at $46 a share, it’ll be yet another litmus test for the struggling IPO market.
The centuries-old shoemaker that specializes in cork-soled sandals—public opinion for which oscillates between frumpy and fashionable—has become part of the zeitgeist. Footwear made by the German brand founded way back in 1774 can today be found everywhere from surgical wards the closets of celebrities, including supermodels Gigi Hadid and Kendall Jenner as well as actors Juliane Moore and Emma Roberts. The comfort wear brand has even released lines in collaboration with luxury brands Dior and Manolo Blahnik.
While it has all the makings of the mimicking the charmed fate of another ugly-but-popular shoe brand Crocs on the stock market, there’s no guarantee it won’t tank like another ugly-but-popular shoe brand Allbirds—especially because some recent IPOs that were touted to be blockbusters have delivered underwhelming performances.
Report cards: Arm and Instacart IPOs
In the post-pandemic world, where the Fed kept hiking interest rates and spawning recession fears, big-ticket IPOs were nowhere to be seen. But this year was supposed to be different with a string of high-profile public debuts lined up. Yet the response has been lukewarm at best when highly-anticipated stock offerings have made their way to the markets in recent months.
In mid-September, Wall Street placed its bet on Alibaba’s chip giant Arm breathing life into the IPO market. However, despite the day one surge, the stock price is down 14 percent since its debut.
The Instacart IPO that followed failed to impress as well. The stock price of the grocery delivery company, which faces stiff competition from rivals like DoorDash and Uber, is barely hovering over its initial IPO price.
Analyst ratings aren’t propping up the two stocks either. And venture capital firms have been urging startups to rethink their decisions to go public.
Birkenstock’s debut in the 2023 IPO market, by the digits
-22%: Decrease in the number of IPOs through Oct. 11 in 2023 compared to 2022. There have been 127 this year; in 2021, there were more than 1,000 IPOs in the US.
15%: Odds of a recession over the next 12 months, according to Goldman Sachs. That’s pretty much in line with the historical average chance of a recession on any given year. Neither Bank of America or JPMorgan Chase expects a recession this year.
$8.6 billion: Birkenstock’s valuation when it makes its public market debut at $46 a share
2.9%: Projected growth in worldwide footwear sales over 2022, according to market research firm Euromonitor International.
83%: Share of Birkenstock that L Catterton, a private equity firm backed by LVMH that bought a majority stake in 2021, will still own after the IPO. Alexandre Arnault, the son of LVMH Chairman Bernard Arnault, will join Birkenstock’s board.
3.6: Pairs of Birkenstocks the average US customer of the brand owns, according to a customer survey conducted by the company.
90%: Recent Birkenstocks purchasers who indicated a desire to purchase again, according to the company survey.
Quotable: Birkenstock is timeless
“Some say: ‘Birkenstock is having a moment.’ I always reply then ‘this moment has lasted for 250 years, and it will continue to last’—driven by an international consumer movement toward casualization, a growing preference for healthy products, an increasing appreciation of craftmanship and a preference for brands with a purpose.”
—CEO Oliver Reichert in a Sept. 12 regulatory filing with the Securities and Exchanges Commission (SEC) announcing the IPO
Fun fact: Barbie chose Birkenstocks
In the billion-dollar blockbuster Barbie, the actor playing the titular character, Margot Robbie, is made to chose between high heels (representative of Barbieland) and a pair of Birkenstock sandals (representative of the real world) in a prominent scene in the trailer and the film. She then wears a pair—Arizona Big Buckle Nubuck Vegan Leather Birkenstocks in Rose—in the film’s climax.